Question
Assume Michael wishes to purchase shares in company XYZ. XYZ announces that it will pay a dividend in the next year equal to $0.50, after
Assume Michael wishes to purchase shares in company XYZ. XYZ announces that it will pay a dividend in the next year equal to $0.50, after which the share price will be $5. How much should Michael pay for the shares now, assuming an interest rate of 10 per cent per annum?
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Financial Institutions Management A Risk Management Approach
Authors: Anthony Saunders, Marcia Cornett, Otgo Erhemjamts
10th Edition
1260013820, 978-1260013825
