Dr. FMS is interested in buying ordinary shares of Online Exam Ltd. Based on information available to her. He estimates that the company will pay the following dividends in the next five years.He also estimates that at the end of fifth year, she will be able to sell the shares at Rs. 30. What is the maximum price he would pay today if her rate of return for this kind of risk is 13%?
Dr. FMS is interested in buying ordinary shares of Online Exam Ltd. Based on information available to her. He estimates that the company will pay the following dividends in the next five years.He also estimates that at the end of fifth year, she will be able to sell the shares at Rs. 30. What is the maximum price he would pay today if her rate of return for this kind of risk is 13%?
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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Dr. FMS is interested in buying ordinary shares of Online Exam Ltd. Based on
information available to her. He estimates that the company will pay the following
dividends in the next five years.He also estimates that at the end of fifth year, she will be able to sell the shares at Rs. 30.
What is the maximum price he would pay today if her
13%?
Transcribed Image Text:Year-end
Dividend per Share (Rs.)
3.5
4
4
4.25
5
5.5
2.
3.
4)
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