Solution-What price should the shares sell for at the end

What price should the shares sell for at the end of year two

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Question 1: Polycorp has just paid a dividend of $5. The company pays dividends annually. Dividends are expected to grow at 0.13 pa for the next two years and for 0.04 thereafter for the foreseeable future. At what price should the shares sell for at the end of year two if the required rate of return is 0.12? Answer to the nearest cent, e.g $5.678 should be entered as 5.68. Do not enter the $ sign. Note that all growth rates and the required rate are expressed as a decimal, so .06 is 6% pa.

Reference no: EM132598435

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What price should the shares sell for at the end of year two

Reference no: EM132598435

Reference no: EM132598435

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