Question: Explain the difference in assumptions in the Gordon's growth model and Solomon's model in the calculation of share price (2mks) b) Kirengo Company Ltd is

Explain the difference in assumptions in the Gordon's growth model and Solomon's model in the calculation of share price
(2mks)
b) Kirengo Company Ltd is expected to announce a dividend per share of Shs.
10 next year. The future annual growth rate in dividends and hence capital gain is expected to be 4%. The company's existing assets generate in perpetuity a constant annual amount of earnings per share (EPs) of Shs. 0.37 and retains in perpetuity a constant annual proportion of 0.4 of EPS from existing assets and a constant annual rate of return of 15%. The company's discount rate is 12%
Required:
Calculate the share price using:
i. Gordon's' ground model(2mks)
ii. Solomon's model(3mks)

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