The market capitalization rate for each share

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Reference no: EM131912179

Consider the following shares

1. A is expected to provide a dividend of Sh.10/= per share forever, starting two years from now.

2. B is expected to pay a dividend of Shs.5/= per share in one year's time. Therefore, dividend growth is expected to be 4% per annum forever.

3. C is expected to pay a dividend of Shs.5/= per share in one year's time. Therefore, dividend growth is expected to be 20% per annum for four years and Zero thereafter.

If the Market capitalization rate for each share is 10% per annum, which share is the most Valuable?

Reference no: EM131912179

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