A Share You Are Interested in Paid a Dividend of €1

question 19

Multiple Choice

A share you are interested in paid a dividend of €1 last month.The anticipated growth rate in dividends and earnings is 25% for the next 2 years before settling down to a constant 5% growth rate.The discount rate is 12%.Calculate the expected price of the share.

• A)€15.38
• B)€20.50
• C)€21.04
• D)€22.27
• E)€26.14

---

Definitions:

pH

Measure of the number of hydrogen ions in a water-based fluid.

Surface Tension

The elastic tendency of a fluid's surface that allows it to resist an external force, due to intermolecular forces.

Solvent

Liquid in which other substances dissolve.

Cohesion

The force that holds molecules of the same substance together, such as water molecules in a drop of water.