You have been asked to value the shares of Atlas Enterprises. The company just paid a...

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You have been asked to value the shares of Atlas Enterprises. The company just paid a dividend of $3.50 per share, which is expected to grow at 2% p.a. for the next 3 years. The dividend is then expected to remain fixed at the year 3 level in perpetuity. Your research has revealed that Atlas' shareholders expect to earn a return of 8% p.a. on their investment. What would you consider to be a fair share price? You have been asked to value the shares of Atlas Enterprises. The company just paid a dividend of $3.50 per share, which is expected to grow at 2% p.a. for the next 3 years. The dividend is then expected to remain fixed at the year 3 level in perpetuity. Your research has revealed that Atlas' shareholders expect to earn a return of 8% p.a. on their investment. What would you consider to be a fair share price?

Answer rating: 100% (QA)

To determine a fair share price for Atlas Enterprises we can use the dividend discount model DDM to ... View the full answer