i) Based on the information provided above, apply Gordon’s growth model to compute the dividend growth rate. explain how to find growth rate by showing formula which will used. ii) If you can earn 13% percent on similar-risk investments, what is the most you would be willing to pay per share?

i) Based on the information provided above, apply Gordon’s growth model to compute the dividend growth rate. explain how to find growth rate by showing formula which will used. ii) If you can earn 13% percent on similar-risk investments, what is the most you would be willing to pay per share?

Name: ABC plc has paid the following dividends over the past seven years: Y
Uploaded: 2024-03-20T06:51:32.000Z
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Description: ABC plc has paid the following dividends over the past seven years: YearDividend per share2014£2.352013£2.282012£2.102011£1.952010£1.822009£1.8020082007£1.73£1.61 i) Based on the information provided above, apply Gordon’s growth model to compute the

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter11: Determining The Cost Of Capital

Section: Chapter Questions

Problem 5MC

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Calculate the annual dividend growth rate (include excel formulas) Based on the annual dividend growth rate, will you forecast a constant or non-constant growth in dividends? Explain? Date Dividends 8/11/2010 0.3025 12/8/2010 0.3025 3/9/2011 0.365 5/11/2011 0.365 8/10/2011 0.365 12/7/2011 0.365 3/8/2012 0.3975 5/9/2012 0.3975 8/8/2012 0.3975 12/5/2012 0.3975 3/8/2013 0.47 5/8/2013 0.47 8/7/2013 0.47 12/4/2013 0.47 3/7/2014 0.48 5/7/2014 0.48 8/6/2014 0.48 12/3/2014 0.48 3/11/2015 0.49 5/6/2015 0.49 8/5/2015 0.49 12/2/2015 0.49 3/9/2016 0.5 5/11/2016 0.5 8/10/2016 0.5 12/7/2016 0.5 3/8/2017 0.51 5/10/2017 0.51 8/9/2017 0.51 12/6/2017 0.51 12/7/2017 0.51 3/8/2018 0.52 5/10/2018 0.52 8/9/2018 0.52 12/6/2018 0.52 3/14/2019 0.53 5/9/2019 0.53
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Use the historical dividend data below to calculate the constant growth rate, estimate the price of O'Brien Ltds’ common stock knowing that the investor has an 19% required rate of return. 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 $0.41 $0.48 $0.56 $0.65 $0.75 $0.88 $0.99 $1.10 $1.13 $1.39 Question 10Answer a. g= 17.50% and Price (P0) = $56.43 b. g= 14.04% and Price (P0) = $31.49 c. g= 27.4% and Price (P0) = $300.81 d. g= 14.53% and Price (P0) = $35.60
Use the historical dividend data below to calculate the constant growth rate, estimate the price of O'Brien Ltds’ common stock knowing that the investor has an 19% required rate of return. 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 $0.42 $0.48 $0.56 $0.65 $0.75 $0.88 $0.99 $1.10 $1.13 $1.37
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Plc plc has paid the following dividends over the past seven years: Year Dividend per share 2020 £2.30 2019 £2.22 2018 £2.05 2017 £1.95 2016 £1.86 2015 £1.79 2014 2013 £1.74 £1.65 i) Based on the information provided above, apply Gordon’s growth model to compute the dividend growth rate.
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ABC plc has paid the following dividends over the past seven years: Year Dividend per share 2014 £2.35 2013 £2.28 2012 £2.10 2011 £1.95 2010 £1.82 2009 £1.80 2008 2007 £1.73 £1.61 i) Based on the information provided above, apply Gordon’s growth model to compute the dividend growth rate. ii) If you can earn 13% percent on similar-risk investments, what is the most you would be willing to pay per share?