FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ABC Ltd just paid an annual dividend of $5. You estimate that the annual dividend will be expected to grow at a constant rate of

ABC Ltd just paid an annual dividend of $5. You estimate that the annual dividend will be expected to grow at a constant rate of 5% p.a. and that the required return on ABC Ltd shares is 13% p.a. Which of the following is closest to the value of ABC Ltd shares estimated using the constant growth model?

Group of answer choices

1.$62.50

2.$75.00

3.$65.63

4.$71.43

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Which Crypto Currency Should I Buy Make Finding And Investing In New Crypto Currencies Fun Easy And Profitable

Which Crypto Currency Should I Buy Make Finding And Investing In New Crypto Currencies Fun Easy And Profitable

Authors: Lisa Phillips

1st Edition

1732644586, 978-1732644588

More Books

Students also viewed these Finance questions

Question

★★★★★
Carbon dioxide (CO2) is the gas that is mainly responsible for global warming (the greenhouse effect). The burning of fossil fuels is a major cause of the increased concentration of CO2 in the...

Answered: 1 week ago

Question

★★★★★
Imagine that you are working as a financial accountant for Peyton Approved, and you have been charged with revising its financial information. The company has experienced tremendous growth in the...

Answered: 1 week ago

Question

★★★★★
Place all those attributes that do not correspond with your self-image outside the circle. Does the resulting description of your self-image show internal consistency?

Answered: 1 week ago

Question

★★★★★
Heathrow issues $200,000 of 6%, 15-year bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31st. The bonds are issued at a price of $1,728,224. HEATHROW Bonds issued,...

Answered: 1 week ago

Question

★★★★★
ABC Ltd just paid an annual dividend of $5. You estimate that the annual dividend will be expected to grow at a constant rate of 5% p.a. and that the required return on ABC Ltd shares is 13% p.a....

Answered: 1 week ago

Question

★★★★★
Data Analysis Plan The four variables in this test are the number of correct answers in quiz 1, previous GPA, total points earned in class, and the number of correct answers in the final exam. This...

Answered: 1 week ago

Question

★★★★★
Optima Ltd. is committed to supply 24000 bearings per annum to BKT Ltd. on a steady basis. It is estimated that it costs ? 2.40 as inventory holding cost per bearing per annum and that the set-up...

Answered: 1 week ago

Question

★★★★★
Johnson Power Company (JPC) has historically discriminated against Hispanics. At JPC, the lowest paying jobs were held by Hispanics. The Company had employees take a broad aptitude (IQ) test, on...

Answered: 1 week ago

Question

★★★★★
1. An abstract data type that supports the operations insert, delete and search is called a (a) Graph (b) Dictionary (c) Both (a) and (b) (d) None 2. Last In First Out: ...

Answered: 1 week ago

Question

★★★★★
1. The wealth definition of economics is given by (a) Adam Smith (b) Alfred Marshall (c) Robbins (d) Samuelson 2. Which of the following is concerned with micro economics? (a) the...

Answered: 1 week ago

Question

★★★★★
1 . Television News channels importantance of our Life pattern ?

Answered: 1 week ago

Previous Question Next Question