Problem 9

ProblemX The company XZ Inc. just paid an annual dividend of 2$ per share. Ten years ago, the company's dividend was 12$ per share. The managers decided for 2 splits during the past 10 years: A 3 for 1 split in 2008 and another 3 for 1 in 2011. a) If the required return on these common shares is 14%, calculate the price of the shares. b) Decompose the required return in return in dividend and return in capital