Share market price today

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1a) A share has the following expected cashflow. A $5 dividend at the end of 1 year that remains constant for the next 15 years, and then grows at 1.5% per year. Show that the share's market price today should be P 0 = $276.85

1b) A share has the following expected cashflow. First a $3 dividend at end of 1 year, that grows constantly at 2% for the next 10 years, and then grows at 1% per year for the remaining life of the company (in perpetuity). Show that the share's market price today should be P 0 = $162.61

Reference no: EM132284859

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