Question
You are thinking of buying shares in Lend Lease Limited (LLC). You expect the company to pay a $0.19 dividend over the next year and
You are thinking of buying shares in Lend Lease Limited (LLC). You expect the company to pay a $0.19 dividend over the next year and you believe you can sell your shares for $8.60 in one year.
(a) If this company's required return on equity is 7.5%, calculate the valuation for LLC shares.
(b) If the current market price for LLC shares is $8.83, should you buy them? Explain your answer.
(Include enough work to show you understand the calculations.)
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Fundamentals of Corporate Finance
Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim
6th Canadian edition
1259024962, 978-1259024962
