A company earns OMR 20 per share at an internal rate of 10%. The firm has a policy of paying 50% of earnings as dividends. If the required rate of return is 10%, what is the price of the share under Gordon model? a. OMR 100 b. OMR 300 c. OMR 50 d. OMR 200

A company earns OMR 20 per share at an internal rate of 10%. The firm has a policy of paying 50% of earnings as dividends. If the required rate of return is 10%, what is the price of the share under Gordon model? a. OMR 100 b. OMR 300 c. OMR 50 d. OMR 200

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Q49

OMR 100

OMR 300

OMR 50

OMR 200

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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