Company capital increase and share expansion

Assignment Help Financial Management

Reference no: EM132061286

1. Assuming that the dividend discount model holds, the price of one share in ABC Ltd is $18.76. If the current dividend discount is $0.80 per share and the cost of equity capital is 10% per annum, what is the implied growth rate?

2. Assuming that this year's company's capital increase and share expansion, what factors may lead to price earnings ratio rising from 20 to 90?

Reference no: EM132061286

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