a) A share will pay its first dividend of $1.90 in one year. The dividend will be paid every year at a constant growth rate of 5% p.a. The rate of return is 13% p.a. effective. Calculate the price of the share in 2 years using the dividend discount model (DDM). (Round your answer to the nearest cents.)
a) A share will pay its first dividend of $1.90 in one year. The dividend will be paid every year at a constant growth rate of 5% p.a. The rate of return is 13% p.a. effective. Calculate the price of the share in 2 years using the dividend discount model (DDM). (Round your answer to the nearest cents.)
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 6P
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