Question
May-bank Berhad is a dividend paying company and it currently pays RM3 as dividend. The dividend is expected to grow at the rate of 30%
May-bank Berhad is a dividend paying company and it currently pays RM3 as dividend. The dividend is expected to grow at the rate of 30% in the first 3 years and then return to its long-run constant growth rate of 6%. The required rate of return is 13%.
(i)What is the value of the stock today?
(ii) Identify two limitations of the Constant Growth Model or Gordon Growth Model
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Finance For Executives Managing For Value Creation
Authors: Gabriel Hawawini, Claude Viallet
6th Edition
1473749247, 9781473749245
