The share price. Introduction: Dividend discounted model is a method of calculating a company’s stock value. The expected value is the sum of future dividend payments, which is discounted back to their present values . In other words, stock value is based on the sum of the present values of the future dividend. Shares are the common stocks that are divided into smaller units of equal value and issued to the public, in order to raise funds.

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Chapter 9, Problem 29P

a)

Summary Introduction

To determine: The share price.

Introduction:

Dividend discounted model is a method of calculating a company’s stock value. The expected value is the sum of future dividend payments, which is discounted back to their present values. In other words, stock value is based on the sum of the present values of the future dividend.

Shares are the common stocks that are divided into smaller units of equal value and issued to the public, in order to raise funds.

b)

Summary Introduction

To find:

The price that the Person S likely to obtain when the dividend is revised and state the reason.

Introduction:

Dividend discounted model is a method of calculating a company’s stock value. The expected value is the sum of the future dividend payments, which is discounted back to their present values. In other words, stock value is based on the sum of the present values of the future dividend.

Shares are the common stocks that are divided into smaller units of equal value and issued to the public, in order to raise funds.

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