Question
one of the investment opportunities is tiger airlines. they have paid an annual dividend of $4.25 for the past 25 years and are expected to
one of the investment opportunities is tiger airlines. they have paid an annual dividend of $4.25 for the past 25 years and are expected to continue this dividend indefinitely. assuming the market requires a 12.5% return from tiger airlines, what is the value of one of their shares?
2. what if we assumed that tiger airlines they would start increasing their dividend by 2.9% per year? What would be a fair price to pay for one share in that scenario?
3. tiger airlines is currently trading at $30.88. does it represent a good buying opportunity at this price? Explain your answer.
4. Jetstar airlines currently pays an annual dividend of $4.50 and the dividend is expected to grow at an annual rate of 2.70%. assuming the market requires an 8.9% return from jetstar, what is one of their shares worth?
5. How much would one jetstar airline share be worth jetstar airlines stopped growing their dividends at 2.7% after 5 years and instead grew them at 1.6% after that, indefinitely?
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