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Constant for the rest of life

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1) a) A share has the following expected cashflow. It has zero dividends for 10 years, then a $5 dividend that remains constant for the rest of its life. Show that the share's market price today should be P 0 = 124.02.

b) A share has the following expected cashflow. It has zero dividends for 2 years, then a $5 dividend that is constant for 2 years, and then it grows at 1% per year. Show that the share's market price today should be P 0 = 233.36

Reference no: EM132284856

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