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The following table contains information concerning common shares of 3 companies: Companies Rapido Ordino Slomo Next dividend (annual) 1$ 1.80$ 2.50$ Dividend rate of growth
The following table contains information concerning common shares of 3 companies:
Companies | Rapido | Ordino | Slomo |
Next dividend (annual) | 1$ | 1.80$ | 2.50$ |
Dividend rate of growth (annual) | 12.5% | 6% | 3% |
Required return (annual) | 15% | 10.5% | 9.25% |
- Calculate the prices of these shares.
- Decompose the expected returns in return in dividend and return in capital.
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