Problem 5: Ordinary Shares, constant growth rate: The expected rate of return of the shareholders is 18%. The dividend per share was P27 last year. The growth rate of the share prices is 8%. There are 30,000 shares issued. How much is the total value of the equity?

1. A company just paid dividends of $2.75 per share. The company has a constant growth of 5.5%. The risk free rate is 2.5%, beta is 0.90 and market return of 8%. The stock is selling at $75.50. 1. Determine the rate of return on equity. 2. What is the stock price after a year?

Problem 4: Ordinary Shares, no growth rate: The expected rate of return of the shareholders is 18%. The expected dividend to be received one year from now is P27. What should the value of each share be?

Cost of Equity: Dividend Growth Summerdahl Resort's common stock is currently trading at $39 a share. The stock is expected to pay a dividend of $2.25 a share at the end of the year (D1 = $2.25), and the dividend is expected to grow at a constant rate of 7% a year. What is the cost of common equity? Round your answer to two decimal places.