Question
QUESTION THREE Suppose Mwanga holds a stock security paying dividend of D 0 = K2000 per year and his security is trading in the market
QUESTION THREE
Suppose Mwanga holds a stock security paying dividend of D0 = K2000 per year and his security is trading in the market where the interest rate is 10%. If dividend on his security is set to grow at a rate of 8% per annum; find:
| a) The expected dividend streams for the next 3 years. |
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| b) The present values of the dividends given in (a). |
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| c) What is the intrinsic value of Mwangas stock? |
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d) What is the expected market price of Mwangas stock, one year from now?
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Handbook Of Financial Intermediation And Banking
Authors: Anjan V. Thakor, Arnoud Boot
1st Edition
0444515585, 978-0444515582
