Question
Consider a company that has a current dividend of $2.40, a required return on equity of 11% and an expected growth rate in dividends of
Consider a company that has a current dividend of $2.40, a required return on equity of 11% and an expected growth rate in dividends of 4%.
(a) Calculate the valuation of these shares today.
(b) If the current market price of these shares is $28.59, what should you do? Why?
(c) If markets are strong form efficient, is there any point in doing the valuation in Part (a)? Why?
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The Complete Personal Finance Handbook
Authors: Teri B Clark
1st Edition
160138047X, 978-1601380470
