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What price would you be willing to pay for a share

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Q1. Suppose ABC plc will pay a dividend of 55p at the end of this year and 75p per share next year. You expect ABC's stock price to be 500p in two years. If ABC' cost of equity capital is 10%, what price would you be willing to pay for a share of ABC' stock today if you planned to hold the stock for two years?

Q2. Ping Plc plans to pay its first dividend of 20p in 3 years' time with dividends growing thereafter at a rate of 4% per annum. If the cost of equity capital is 6%, what is the current market value of the share to the nearest penny?

Reference no: EM133051085

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