Question
1) A company has paid a dividend of $20 for many years. The company expects to continue paying dividends at the same amount in the
1) A company has paid a dividend of $20 for many years. The company expects to continue paying dividends at the same amount in the future.
The company's cost of equity is 10%.
Required: Calculate the market value of the share.
2) A company has paid a dividend of $30 for many vears. The company expects to continue paying dividends at the same amount in the future The company's current share price is $1.50.
Required: Calculate the cost of equity - Ke.
3) Big D, Inc., just paid a dividend of $50 per share. It is expected to increase its dividend by 2% per year. The company's current cost of equity is 15%.
Required: Calculate the market value of the share.
4) A company expects to pay a dividend of $10 per share. It is expected to increase its dividend by 5% per year. The company's current share price is $105.
Required: Calculate the cost of equity - Ke
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