Question
Assets Cash 150 Account receivable 180 inventory 610 property 1280 total 2220 Liabilities: Account payable 130 bank loan (interest only) 250 mortgage loan 510 corporate
Assets
Cash 150
Account receivable 180
inventory 610
property 1280
total 2220
Liabilities:
Account payable 130
bank loan (interest only) 250
mortgage loan 510
corporate bonds 340
total 1230
Shareholder's equity
Ordinary shares 450
Preference shares 250
Retained earnings 290
total 990
Total L+E 2220
Tax rate = 30%
The ordinary shares are shown on the balance sheet at their book value of $1 per share. They have a beta of 1.9. They are expected to pay a dividend of $0.05 next year. The dividend is expected to grow at a rate of 7% p.a. for the following 4 years, and after that it will grow at a constant rate of 3% p.a. in perpetuity.
Cost of ordinary shares=?
Dividend 1 year from now?
Dividend 2/3/4/5/6 years from now?
Price of ordinary shares=?
total market value of ordinary shares=? weight of value of ordinary shares=?
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