Question
MyFriends is an internet company well enough established for the Board of Directors to approve annual dividend of $2.00 per share. Given the companies previous
MyFriends is an internet company well enough established for the Board of Directors to approve annual dividend of $2.00 per share.
Given the companies previous performance investors anticipate the Board to increase the dividend at a rate of 5% per year.
The current interest rate is 10%.
If the current market share price is $40 on the stock exchange, would this be a good buy? Why?
Hint:A Example similar to this question is given in Chapter 6Calculate the share price and compare to $40.
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Analysis for Financial Management
Authors: Robert C. Higgins
12th edition
1259918963, 9781260140729 , 978-1259918964
