A company paid a dividend of rs 1.75 per share during the current year.It is expected to pay a dividend of rs 2 per share during the next year. Investors forecast a dividend of rs. 3 and rs. 3.50 per share respectively during the two subsequent years. After that it is expected that annual dividends will grow at 10% per year into an indefinite future. If the rrr is 20% , find the intrinsic value of share.
Answers
Answered by
0
xdlflgj
t
ut
uf.jc.G.f
flflhluru
t
u
f
jf
if
if
flute
furjft
t
ut
uf.jc.G.f
flflhluru
t
u
f
jf
if
if
flute
furjft
Answered by
0
Answer:
The intrinsic value of share. is RS 28.06
Explanation:
v1 = 2/(1+0.2)^1 +3/(1+0.2)^2+3.5/(1+0.2)^3 = RS 5.78
v2 = 3.5 (1+0.10) / (0.2-0.1) (1+0.2)^3 = RS 22.28
p0 = v1+v2 = 5.78+22.28 = RS 28.06
The intrinsic value of share. is RS 28.06
Similar questions