An ordinary share currently pays a dividend of R2 for the year. Expected dividends growth is 20% for the next three years and then growth is expected to revert to 7% thereafter for an indefinite amount of time. The appropriate required rate of return is 15%. What is this ordinary share’s value? 1. R33.89 2. R34.56 3. R36.93 4. R37.23

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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An ordinary share currently pays a dividend of R2 for the year. Expected dividends growth
is 20% for the next three years and then growth is expected to revert to 7% thereafter for an
indefinite amount of time. The appropriate required rate of return is 15%. What is this ordinary
share’s value?
1. R33.89
2. R34.56
3. R36.93
4. R37.23

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