Nicholls Enterprises Pty Ltd has been selling software supplies for the past 20 years. The company’s product line has seen very little change in the past 5 years, and the company does not expect to add any new items for the foreseeable future. Last year, the company paid a dividend of $4.45 to its ordinary shareholders. The company is not expected to grow its revenues for the next several years. If your required rate of return for such companies is 13 per cent, what is the current value of this company’s shares?

Nicholls Enterprises Pty Ltd has been selling software supplies for the past 20 years. The company’s product line has seen very little change in the past 5 years, and the company does not expect to add any new items for the foreseeable future. Last year, the company paid a dividend of $4.45 to its ordinary shareholders. The company is not expected to grow its revenues for the next several years. If your required rate of return for such companies is 13 per cent, what is the current value of this company’s shares?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 22P

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