Ve are to choose the dividend payment policy in the company in such o maintain the current market value (price) of the company. There are ividend payment models to choose from: fixed dividend and the Gord lease indicate how much (in percentage points) should the nearest fix ividend be higher than the nearest dividend paid according to the Gor nodel, if we assume that the increase in profits of the company (to be mong shareholders) will be at the level of 1.5% each year and we asSL ne discount rate in this market will be 7%. Calculate the fixed dividend earest dividend according to the Gordon model is 10 PLN.
Ve are to choose the dividend payment policy in the company in such o maintain the current market value (price) of the company. There are ividend payment models to choose from: fixed dividend and the Gord lease indicate how much (in percentage points) should the nearest fix ividend be higher than the nearest dividend paid according to the Gor nodel, if we assume that the increase in profits of the company (to be mong shareholders) will be at the level of 1.5% each year and we asSL ne discount rate in this market will be 7%. Calculate the fixed dividend earest dividend according to the Gordon model is 10 PLN.
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
Related questions
Question
![We are to choose the dividend payment policy in the company in such a way as
to maintain the current market value (price) of the company. There are two
dividend payment models to choose from: fixed dividend and the Gordon model.
Please indicate how much (in percentage points) should the nearest fixed
dividend be higher than the nearest dividend paid according to the Gordon
model, if we assume that the increase in profits of the company (to be distributed
among shareholders) will be at the level of 1.5% each year and we assume that
the discount rate in this market will be 7%. Calculate the fixed dividend if the
nearest dividend according to the Gordon model is 10 PLN.
В I](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb4fb233a-c9d0-4b62-a3a3-3f5ee1b6e89a%2Fa18dc245-7611-4c81-bcfd-b957df59da6e%2F0c47mg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:We are to choose the dividend payment policy in the company in such a way as
to maintain the current market value (price) of the company. There are two
dividend payment models to choose from: fixed dividend and the Gordon model.
Please indicate how much (in percentage points) should the nearest fixed
dividend be higher than the nearest dividend paid according to the Gordon
model, if we assume that the increase in profits of the company (to be distributed
among shareholders) will be at the level of 1.5% each year and we assume that
the discount rate in this market will be 7%. Calculate the fixed dividend if the
nearest dividend according to the Gordon model is 10 PLN.
В I
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Foundations Of Finance](https://www.bartleby.com/isbn_cover_images/9780134897264/9780134897264_smallCoverImage.gif)
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
![Fundamentals of Financial Management (MindTap Cou…](https://www.bartleby.com/isbn_cover_images/9781337395250/9781337395250_smallCoverImage.gif)
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
![Corporate Finance (The Mcgraw-hill/Irwin Series i…](https://www.bartleby.com/isbn_cover_images/9780077861759/9780077861759_smallCoverImage.gif)
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education