Question
Inc. today paid $1.140 divided per share at the end its current financial year 2020. The current price for a share is $23.94. Investors expect
Inc. today paid $1.140 divided per share at the end its current financial year 2020. The current price for a share is $23.94. Investors expect dividends over the next 4 years to be End of financial years Dividend per share ($) 2021 1.197 2022 1.257 2023 1.320 2024 1.386 The dividend growth pattern is expected indefinitely. Calculate investors required rate of return If investors expect dividend growth to be 1 percent higher than the existing growth, discuss the impact to the share price and other areas Under the constant growth dividend valuation model, how would the action of the financial management positively affect the shareholders wealth? Discuss by providing business example.
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