Reference no: EM132561987

Question - Josephine inherited an investment in black stuff collieries ltd consisting of 1000 ordinary shares from the estate of her late grandmother. For the past 10 years, black stuff has paid a dividend of R8 per share per year. The management of black stuff expects to continue to pay the same dividend for the foreseeable future. When Jospehine late grandmother purchased the shares eight years ago, the required rate of return for the shares was 15%. JOSEPHINE WANTS TO SELL THESE SHARES TO PAY for her university studies. The current required rate of return for the shares is 11%. Calculate the current value of a black stuff ordinary share and also calculate the total gain or loss on the shares if Josephine sells them now.