What price should norah inc shares be sold

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Reference no: EM132887716

Norah Inc. has just paid an annual dividend of €0.99. Analysts forecast an 11.5% per year increase in company profits over the next five years. Beyond that, Norah Inc.'s profits are expected to grow at the industry average rate of 5.6% per year.

Problem a) If Norah Inc.'s cost of equity is 9.2% per year and its dividend payout ratio remains constant, at what price should Norah Inc.'s shares be sold using the dividend discount model?

Problem b) What is the most relevant / direct discount rate to use in determining the price of the company's shares?

Reference no: EM132887716

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