Ans 5) $ 21.00
P0 = | Price of Share |
D1 = | Current Dividend |
Ke = | Cost of Equity |
g = | growth rate |
P0 = | D1 / (Ke - g) |
P0 = | 2.10 / (15%- 5%) |
P0 = | 21.00 |
D1 = | D0* (1 + g) |
D1 = | 2* (1 + 5.00%) |
D1 = | 2.1000 |
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