Question
Struggling on this question! Help is appreciated, thank you XCON is expected to pay a dividend per share of $1.1 for the coming year. It
Struggling on this question! Help is appreciated, thank you
XCON is expected to pay a dividend per share of $1.1 for the coming year. It expected that XCON can maintain a dividend growth of 15% a year for the next 3 years. Given an in-depth analysis, it comes to term that the growth rate will decline to 5 per cent per annum and remains at that level indefinitely. The required rate of return on the shares is 12 per cent per annum.
i)Calculate the current share price.
ii)If the market for the company is $20.00, will you recommend to buy this stock?
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