Question
You are considering purchasing shares that are expected to pay a constant annual dividend of $20 per share forever growing at 2 % per year.
You are considering purchasing shares that are expected to pay a constant annual dividend of $20 per share forever growing at 2 % per year. The share will start paying dividend from year 3 and onwards. If the required rate of return on this share is 12%, what is the price of this share?
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Entrepreneurial Financial Management An Applied Approach
Authors: Jeffrey R Cornwall, David O Vang, Jean M Hartman
5th Edition
0367335417, 978-0367335410
