What are the assumptions in the dividend growth model

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Reference no: EM131569531

• Company X has paid constant dividend $2 per share for years. Investors required return is 7%.

• What is company X share price?

• If company announces that they will increase dividends to $2,1 per share starting next period and confirm their intention to keep on increasing dividend by 5% per year. What is company X share price now?

• What will be the share price in 10 years time?

• What are the assumptions in the dividend growth model? Discuss.

Reference no: EM131569531

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