Question
A share is expected to pay its first dividend of $0.20 in five years' time.The dividend is then anticipated to increase at a constant 3%
A share is expected to pay its first dividend of $0.20 in five years' time.The dividend is then anticipated to increase at a constant 3% p.a. indefinitely.If the required return is 7%, what is a fair value of this share today?
a.$4.44
b.$4.37
c.$3.81
d.$4.67
e.$5.00
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Financial Management Theory and Practice
Authors: Eugene F. Brigham, Michael C. Ehrhardt
16th edition
1337902608, 978-1337902601
