1.
=4/1.1
=3.636363636
2.
=4*1.35/1.1^2
=4.462809917
3.
=4*1.35^2/1.1^3
=5.477084899
4.
No growth rate higher than required return or growth rate higher
than industry/economy growth is not possible indefinitely
5. (5 marks) Flueaw Co. has a dividend growth rate of 35% per year. The discount...
Grandiose Growth has a dividend growth rate of 10%. The discount rate is 8%. The end- of-year dividend will be $5 per share. a. What is the present value of the dividend to be paid in year 1? Year 2? Year 3? (Do not round Intermediate calculations. Round your answers to 2 decimal places.) Present Value Year 1 Year 2 Year 3
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(12 Marks) Question 6 James Limited's earnings and dividends have been growing at a rate of 10% per annum. This growth rate is expected to continue for 3 years ( 2019,2020 and 2021). After that the growth rate will fall to 5% per annum for the next 2 years. Thereafter, the growth rate is expected to be 6 % forever. The company just paid out dividend per share of N$3.50 in 2018 and the investors' required rate of return on...
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Triangular Co. will pay a dividend of $3.25 per share, today. The company will continue to pay dividends on a yearly basis, and increase its dividend by 12 percent per year for the next 5 years. After that, the expected dividend growth rate will be negative 3 percent per year forever. If the required return on Triangular stock is 8 percent, and a stock’s share price is equal to the PV of all remainingdividend payments, what will a share of...
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