Question 6: Dividend growth model Assume that the growth rate in dividends is given by: a) Return on equity x Plowback b) Actual growth rate in the past Estimate the cost of equity for each dividend growth calculation for firm ABC if its current share price is 64 pence per share, it has 10 million shares, and its accounts contain the following information: Yle Total profit for year Retained profit for year Dividends Average book equity t-1 '000 1,906 (635) 1,271 29,000 '000 2.020 (673) 1,347 29,000 Estimate the cost of equity for each dividend growth calculation for firm XYZ if its current share price is 206 pence per share, it has 10 million shares, and its accounts contain the following information: Example Profits after tax Retained profit Dividend Share capital + reserves Yle t-1 '000 2,600 1,878 722 t '000 2,600 1,835 765 b/f 29,682 31,560 c/f 31,560 33,395 Question 6: Dividend growth model Assume that the growth rate in dividends is given by: a) Return on equity x Plowback b) Actual growth rate in the past Estimate the cost of equity for each dividend growth calculation for firm ABC if its current share price is 64 pence per share, it has 10 million shares, and its accounts contain the following information: Yle Total profit for year Retained profit for year Dividends Average book equity t-1 '000 1,906 (635) 1,271 29,000 '000 2.020 (673) 1,347 29,000 Estimate the cost of equity for each dividend growth calculation for firm XYZ if its current share price is 206 pence per share, it has 10 million shares, and its accounts contain the following information: Example Profits after tax Retained profit Dividend Share capital + reserves Yle t-1 '000 2,600 1,878 722 t '000 2,600 1,835 765 b/f 29,682 31,560 c/f 31,560 33,395