The Elder Co. is in downsizing mode. The company paid an annual dividend of $2.50 last year. The company has announced plans to reduce the dividend by $0.50 a year. Once the dividend amount becomes zero, the company will suspend all dividends permanently. The required rate of return is 14.5 percent. 

Required:

How much is a share of these shares worth?

Answer rating: 100% (QA)

SOLUTION To calculate the share price of the shares we need to use the dividend discount model DDM T... View the full answer