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Question 1 (15 marks) Assume you have generated the following information and forecast about the share of Company A: Year 2015 2016 2017 2018
Question 1 (15 marks) Assume you have generated the following information and forecast about the share of Company A: Year 2015 2016 2017 2018 Dividend per share $2.21 $2.65 $3.08 $3.48 Share market price $41 $42 $43 $45 In addition, the dividend per share will grow at 3% after 2018, and the requited rate of return is 11%. Required: a. Use the dividend valuation model to find the share prices in 2015 and 2017. (6 marks) b. Given the market prices of shares in the table, please discuss whether this share is a good investment? What additional information is required for your further analysis? (9 marks)
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