X is a shareholder in ABC Company Ltd. Although earnings for the ABC Ltd have varied...
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X is a shareholder in ABC Company Ltd. Although earnings for the ABC Ltd have varied considerably, X has determined that long run average dividends for the firm have been Shs. 2 per share. He expects a similar pattern to prevail in the future. Given volatility of the ABC's dividends X has decided that a minimum rate of 20% should be earned on his shares. Required: What price would X be wiling to pay for the ABC's shares (2 marks) X is a shareholder in ABC Company Ltd. Although earnings for the ABC Ltd have varied considerably, X has determined that long run average dividends for the firm have been Shs. 2 per share. He expects a similar pattern to prevail in the future. Given volatility of the ABC's dividends X has decided that a minimum rate of 20% should be earned on his shares. Required: What price would X be wiling to pay for the ABC's shares (2 marks)
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Related Book For
Financial Reporting Financial Statement Analysis and Valuation
ISBN: 978-0324302950
6th edition
Authors: Clyde P. Stickney
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