National Co., a firm that issues ordinary shares with an average beta, projected to declare a constant amount of P22 dividend annually. The current nominal rate of a 90-day treasury bill is 4% while the inflation is expected at 2.60%. The stock market exhibited a 9% overall return. What is the intrinsic value of the ordinary share issued by National Co.?
National Co., a firm that issues ordinary shares with an average beta, projected to declare a constant amount of P22 dividend annually. The current nominal rate of a 90-day treasury bill is 4% while the inflation is expected at 2.60%. The stock market exhibited a 9% overall return. What is the intrinsic value of the ordinary share issued by National Co.?
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 2P
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National Co., a firm that issues ordinary shares with an average beta, projected to declare a constant amount of P22 dividend annually. The current nominal rate of a 90-day treasury bill is 4% while the inflation is expected at 2.60%. The stock market exhibited a 9% overall return. What is the intrinsic value of the ordinary share issued by National Co.?
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