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How much should be the market value per share

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Question - The Commonwealth Corporation's earnings and dividends have been growing at the rate of 12% per annum. This growth rate is expected to continue for 4 years. After that the growth rate would fall to 8% for the next four years. Beyond that the growth rate is expected to be 5% forever. If the last dividend was Rs. 1.50 and the investors' required rate of return on the stock of Commonwealth is 14%, how much should be the market value per share of Commonwealth Corporation's equity stock?

Reference no: EM133105668

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