Financial information relating to Health Ltd is as follows: Number of ordinary shares 2,000,000 Earnings per share (EPS) 50p Dividend per share (DPS) 25p Growth in dividends 10% Other information: Industry PE 8 Industry β (beta) 1.4 Return on market 14% Risk free rate of return 4% Calculate the value per share of Healthwise Ltd using dividend valuation model; where P0 = D0(1+g)/(Ke – g)
Financial information relating to Health Ltd is as follows: Number of ordinary shares 2,000,000 Earnings per share (EPS) 50p Dividend per share (DPS) 25p Growth in dividends 10% Other information: Industry PE 8 Industry β (beta) 1.4 Return on market 14% Risk free rate of return 4% Calculate the value per share of Healthwise Ltd using dividend valuation model; where P0 = D0(1+g)/(Ke – g)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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Financial information relating to Health Ltd is as follows:
Number of ordinary shares 2,000,000
Earnings per share (EPS) 50p
Dividend per share (DPS) 25p
Growth in dividends 10%
Other information:
Industry PE 8
Industry β (beta) 1.4
Return on market 14%
Risk free rate of return 4%
Calculate the value per share of Healthwise Ltd using dividend valuation model;
where P0 = D0(1+g)/(Ke – g)
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