6) Save Ltd is expanding rapidly. Its dividend growth rate for the coming year is projected at 25%. This rate will decline by 5% points per year until it reaches the industry average of 5%. Once it reaches 5%, it will stay there indefinitely. The most recent dividend was $0.20 per share, and the market requires a return of 16% on investment such as this one. What is the price per share for Save?
6) Save Ltd is expanding rapidly. Its dividend growth rate for the coming year is projected at 25%. This rate will decline by 5% points per year until it reaches the industry average of 5%. Once it reaches 5%, it will stay there indefinitely. The most recent dividend was $0.20 per share, and the market requires a return of 16% on investment such as this one. What is the price per share for Save?
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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Transcribed Image Text:6) Save Ltd is expanding rapidly. Its dividend growth rate for the coming year is projected at 25%.
This rate will decline by 5% points per year until it reaches the industry average of 5%. Once it
reaches 5%, it will stay there indefinitely. The most recent dividend was $0.20 per share, and the
market requires a return of 16% on investment such as this one. What is the price per share for Save?
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