Investors expect dividends to grow at constant annual rate

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Reference no: EM131950831

What is Emkay Electricals Construction Limited’s value if the previous dividend was Do = $4 and investors expect dividends to grow at constant annual rate of

(a) -5%, (b) 0%, (c) 5%, or (d) 10%

Based on data from (i) above, what would be the constant growth model value of Emkay Electricals Construction Limited if the required rate of return was 25% and the expected growth rate was (a) 25%, or (b) 30%?

Are the results found in part ii above reasonable, please explain.

Is it reasonable to think that constant growth stock could have g > rs ? Please explain your answer.

Reference no: EM131950831

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