Liphips Ltd has just paid a dividend per share of €1.20. Shares are valued only on the basis of expected dividends. An annual sustainable growth of dividends of 4% is assumed. The appropriate discount rate (i) is 10% per year. The planning horizon is limited to 20 years. Compute the share value
Liphips Ltd has just paid a dividend per share of €1.20. Shares are valued only on the basis of expected dividends. An annual sustainable growth of dividends of 4% is assumed. The appropriate discount rate (i) is 10% per year. The planning horizon is limited to 20 years. Compute the share value
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 12P
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Liphips Ltd has just paid a dividend per share of €1.20. Shares are valued only on the basis of
expected dividends. An annual sustainable growth of dividends of 4% is assumed. The
appropriate discount rate (i) is 10% per year. The planning horizon is limited to 20 years.
Compute the share value.
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