Unheardof, Ic., has just paid a dividend of $5 per share. This dividend is anticipated to increase at a rate of 15% per year. If the cost of equity for Unheardof is 25%, what should be the market value of a share of the company?
Unheardof, Ic., has just paid a dividend of $5 per share. This dividend is anticipated to increase at a rate of 15% per year. If the cost of equity for Unheardof is 25%, what should be the market value of a share of the company?
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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Transcribed Image Text:Unheardof, Inc., has just paid a dividend of $5
per share. This dividend is anticipated to
increase at a rate of 15% per year. If the cost of
equity for Unheardof is 25%, what should be
the market value of a share of the company?
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