Fight Finance

Courses  Tags  Random  All  Recent  Scores

Scores
keithphw$5,401.61
an4_bolt$4,046.43
Visitor$2,976.43
123$2,635.61
skanibaglu$2,308.63
boodge$1,808.63
Visitor$1,310.00
Visitor$960.00
Stuart$825.90
lukethel...$820.00
Visitor$800.00
Visitor$787.09
Keith_Jnr$720.00
Visitor$720.00
KeithJnr$720.00
mainguye...$709.43
Visitor$570.00
Costanza$526.09
Visitor$480.00
LuluLutt...$480.00
 

Question 6  DDM

For a price of $102, Andrea will sell you a share which just paid a dividend of $10 yesterday, and is expected to pay dividends every year forever, growing at a rate of 5% pa.

So the next dividend will be ##10(1+0.05)^1=$10.50##, and the year after it will be ##10(1+0.05)^2=11.025## and so on.

The required return of the stock is 15% pa.

Would you like to the share or politely ?



Copyright © 2014 Keith Woodward