A company you are considering investing in has a dividend of $0.25 per share. If you...

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Question

A company you are considering investing in has a dividend of $0.25 per share. If you have a required return of 10% and the di

business finance

Answer 1

Answer #1

This question requires application of constant growth dividend discount model according to which: Po - Divi T-9 Po = Price of

Div1 = $0.25 * (1 + 2%) = $0.255

$10.255 010-0.02 2$

$Po = 3.19$

Answer 2

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