Calculate the Estimated Share Price for the Following Companies Assuming

question 29

Essay

Calculate the estimated share price for the following companies assuming a required return of 12% p.a.(a)Red's dividends have been $1.70 per share for some time.It does not reinvest any of its earnings and therefore is not expected to grow in the foreseeable future.(b)White's most recent dividend was $1.70 per share and dividends are expected to continue to grow at 4% indefinitely.

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Definitions:

Well-Reasoned Arguments

Arguments that are logically structured, clearly presented, and supported by solid evidence.

Reflective Way

A thoughtful approach or method characterized by meditation or serious thought about one's experiences and actions.

Lower Guinea

A historical term for a coastal area in West Africa, approximately in the region of the modern countries of Ghana, Togo, Benin, and Nigeria.