RAK Ceramic is currently paying dividend Tk. 4.40 per share, which is expected to grow at a constant rate per year. Investors required rate of return is 15 percent. Calculate the price of the stock based on average growth of the stock, and justify your findings to take stock investment decisions. (CMP=77.50 Tk.) а. Year Dividend per share Growth rate 2014 3.25 Tk. 2015 3.65 Tk. 2016 3.95 Tk. 2017 4.25 Tk. 2018 5.30 Tk. 2019 4.40 Tk.

Intermediate Financial Management (MindTap Course List)
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Author:Eugene F. Brigham, Phillip R. Daves
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Chapter8: Basic Stock Valuation
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RAK Ceramic is currently paying dividend Tk. 4.40 per share, which is expected to grow at a
constant rate per year. Investors required rate of return is 15 percent. Calculate the price of the stock
а.
based on average growth of the stock, and justify your findings to take stock investment decisions.
(CMP=77.50 Tk.)
Year
Dividend per share
Growth rate
2014
3.25 Tk.
2015
3.65 Tk.
2016
3.95 Tk.
2017
4.25 Tk.
2018
5.30 Tk.
2019
4.40 Tk.
Transcribed Image Text:RAK Ceramic is currently paying dividend Tk. 4.40 per share, which is expected to grow at a constant rate per year. Investors required rate of return is 15 percent. Calculate the price of the stock а. based on average growth of the stock, and justify your findings to take stock investment decisions. (CMP=77.50 Tk.) Year Dividend per share Growth rate 2014 3.25 Tk. 2015 3.65 Tk. 2016 3.95 Tk. 2017 4.25 Tk. 2018 5.30 Tk. 2019 4.40 Tk.
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