Is the Following Ordinary Share Priced Correctly? If No, What

question 39

Essay

Is the following ordinary share priced correctly? If no, what is the correct price?
Price = $26.25
Required rate of return = 13%
Dividend year 0 = $2.00
Dividend year 1 = $2.10

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Definitions:

Demographic

Pertains to specific characteristics of populations, such as age, gender, income level, and education, which are used for marketing and social research.

Benefit Basis

The underlying advantages or favorable aspects upon which decisions or actions are based.

Occasion

A specific time or event for which a particular activity is suited or at which it takes place.

Loyalty

The quality of being faithful in one's support of a particular brand, product, or service, often resulting in repeat purchases or continued engagement.