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Compute the anticipated value of the dividends

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Reference no: EM133176023

Question - Surrripp Bhd paid a dividend of RM1.12 per share over the last 12 months. The dividend is expected to grow at a rate of 20 % over the next three years. It will then grow at a normal constant rate of 7% for the foreseeable future. The required rate of return is 12%.

Required -

a) Compute the anticipated value of the dividends for the next three years.

b) Discount each of these dividends back to the present at a discount rate of 12% and then sum them.

c) Compute the price of the share at the end of the third year.

d) Count the present value of the share price.

e) What is the current value of the share?

Reference no: EM133176023

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