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Calculate the expected market price per share

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Question -

a) Milo Limited has just paid a dividend of $0.20 per share and the dividends are expected to grow at a constant rate of 4% per annum. If the required rate of return is 8.5%, calculate the expected market price/value per share. If the current market price of the share is $4.50, will you buy the share? Explain your answer.

b) At times share price which we get from stock exchanges are different to that what we get from any of the valuation models you have learnt in this unit? Explain why you see this difference.

Reference no: EM132560146

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