How much would you pay for asl shares

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1. ASL Ltd's most recent earnings per share was $1.00 and it paid a dividend of $0.60 per share. You expect ASL to earn $1.10 and continue its payout ratio. Assume that you expect to sell the shares for $13.20 at the end of the year. If you require 12 per cent on the shares, how much would you be willing to pay for them today? If you expect a selling price of $11.00 and require an 8 per cent return on this investment, how much would you pay for the ASL's shares?

2. Over the long run, you expect dividends for ASL in Q10 to grow at 8 per cent and you require 11 per cent on the shares. Using the infinite period DDM, how much would you pay for ASL's shares?

Reference no: EM133116051

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