RAK Ceramic is currently paying dividend Tk. 3.70 per share, which is expected to grow at a constant rate per year. Investors required rate of return is 18 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.)    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.

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
10th Edition
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter8: Risk And Rates Of Return
Section: Chapter Questions
Problem 22SP
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  1. RAK Ceramic is currently paying dividend Tk. 3.70 per share, which is expected to grow at a constant rate per year. Investors required rate of return is 18 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.) 

  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.

 

 

2.Explain different types of common stocks with basic features in light of     BD stock market and major challenges of DSE to build up investors’ confidence.

3. Briefly explain the steps in capital budgeting decision making process with constraints of implementation stage.                                  

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