Question
ii) The return on equity of Ahemba Limited is 20%. At its Board meeting recently, shareholders approved a dividend payout ratio of 40% for the
ii) The return on equity of Ahemba Limited is 20%. At its Board meeting recently, shareholders approved a dividend payout ratio of 40% for the foreseeable future. The company just paid a dividend of GHS 25 per share and investors require 15% return on their investment in the company. a) What the growth rate of Ahemba Limited? b) How much dividend will the company pay 10yrs from today? c) What is the price of a stock of Ahemba Limited 10yrs from today assuming the growth rate remains the same forever? d) How much will you pay for a stock of Ahemba Limited today?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started