a) A share will pay its first dividend of $1.90 in one year. The dividend will be paid every year at a constant growth rate of 5% p.a. The rate of return is 13% p.a. effective. Calculate the price of the share in 2 years using the dividend discount model (DDM). (Round your answer to the nearest cents.)
a) A share will pay its first dividend of $1.90 in one year. The dividend will be paid every year at a constant growth rate of 5% p.a. The rate of return is 13% p.a. effective. Calculate the price of the share in 2 years using the dividend discount model (DDM). (Round your answer to the nearest cents.)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter8: Basic Stock Valuation
Section: Chapter Questions
Problem 1P: Thress Industries just paid a dividend of 1.50 a share (i.e., D0 = 1.50). The dividend is expected...
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