22. Using Dividend based valuation technique (zero growth model), what is the current value/true value of the shares in the problem, as stated? Investor CDE wants to buy 1,000 preference shares, P200 par value from Korean Company. According to his sources, the preference shares come with a constant dividend of P30 per share Investor CDE intends to hold the preference shares long-term and has no plans on selling this in the near future. Investor CDE requires a 15% return on all of his investment. What is the value of each preference share? P200 P230 P215 P250
22. Using Dividend based valuation technique (zero growth model), what is the current value/true value of the shares in the problem, as stated? Investor CDE wants to buy 1,000 preference shares, P200 par value from Korean Company. According to his sources, the preference shares come with a constant dividend of P30 per share Investor CDE intends to hold the preference shares long-term and has no plans on selling this in the near future. Investor CDE requires a 15% return on all of his investment. What is the value of each preference share? P200 P230 P215 P250
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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kindly refer to the photos below.
Transcribed Image Text:22. Using Dividend based valuation technique (zero growth model), what is the current value/true
value of the shares in the problem, as stated?
Investor CDE wants to buy 1,000 preference shares, P200 par value from Korean Company.
According to his sources, the preference shares come with a constant dividend of P30 per share
Investor CDE intends to hold the preference shares long-term and has no plans on selling this in
the near future. Investor CDE requires a 15% return on all of his investment. What is the value of
each preference share?
P200
P230
P215
P250
O O
O O
Transcribed Image Text:11. Using one period or multiple period valuation model, what is the current value/true value of the
shares in the problem as, stated?
Investor HAM want to buy shares of Flix Company. When he looked it up at the stock exchange,
Flix Company can be bought at P30 per share. Further research showed that dividends are stable
at P5 per year and it is expected to be resold at P40 per share after a year. Investor HAM expects
a 10% return on his investments and only expects to hold Flix Company shares for a year. What is
the value of the shares based on Investor HAM's computation?
(10 Points)
P40.91
P36.36
P4.55
P40
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