Question
Q3. GDL just paid a dividend of $1.25 per share. You expect dividends to grow at a constant rate of 4% per year for the
Q3. GDL just paid a dividend of $1.25 per share. You expect dividends to grow at a constant rate of 4% per year for the foreseeable future. You require a return of 12% to invest in GDL. How much would you pay for GDL today? Answer by filling in the table below:
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Q4. GDL just paid a dividend of $0.58 per share. You expect dividends to grow at a constant rate of 6% per year for the foreseeable future. You require a return of 15% to invest in GDL. How much would you pay for GDL today? Answer by filling in the table below:
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Q5. GDL just paid a dividend of $1.25 per share. You expect dividends to grow at a constant rate of 4% per year for the foreseeable future. You require a return of 12% to invest in GDL. The price today is $16.25. What do you expect the price to be next year? Answer by filling in the table below:
| D0 | D1 | r | g | P0 | P1 |
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