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please help?? Q4 Roller Limited started trading seven years ago and has gone from strength to strength. Dividends are currently 2p per ordinary share, having
please help??
Q4 Roller Limited started trading seven years ago and has gone from strength to strength. Dividends are currently 2p per ordinary share, having grown at a 15% compound annual rate over the past five years. This growth rate is expected to be maintained for the next three years, after which growth is expected to slow, and it is anticipated that dividends will only grow at 7.5% for the following three years. Thereafter Roller's dividends are expected to grow at 5% per year indefinitely Required: Calculate the current value of 1,000 ordinary shares of Roller Ltd., assuming the required rate of return is 18%. (b) Explain how each of the following factors, taken independently, would affect your valuation, assuming all other factors remain constant: . Interest rates generally rise causing investors to require a higher rate of return on shares in general. Competition in the marketplace impacts adversely on Roller resulting in an anticipated reduction in future growth. . Investors in general re-value upwards their assessment of Roller's overall risk because of the company's growing dependence on overseas markets Step by Step Solution
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