Question
Question 1 i)Jennifer Incorporated is a start-up company which has just issued its Initial public offering (IPO). The company has subsequently been listed on the
Question 1 i)Jennifer Incorporated is a start-up company which has just issued its Initial public offering (IPO). The company has subsequently been listed on the Ghana Stock Exchange (GSE). As a start-up, the company does not intend to pay dividend for the first two years of its existence. Analysts have forecasted that the company will pay GHS 5.00 and GHS 7 per share in the third and fourth year and thereafter the dividend will settle at an annual growth rate of 8% forever. Investors require 15% return on similar start-up companies. a)Calculate the price of a stock of Jennifer Incorporated 4years from today. b)How much will you pay for a stock of Jennifer Incorporated today?
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