Differentiate between variability and volatility of returns

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Reference no: EM132055298

a. AAB company just declared a dividend of GHS5 per share. It is expected that dividend will grow by 10% for the next two years and at 20% for the subsequent three years, thereafter dividend will assume a normal growth of 10% in perpetuity.AAB earns 20% to its shareholders.

How much will you pay for the share today?

How much will you sell it for in 2 years time if market conditions and expectations remain the same?

b. Differentiate between variability and volatility of returns.

Reference no: EM132055298

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