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Beta Plc is about to pay a dividend of 0.40 per share . Dividend growth 5% the share holder required return 20%.
The rate of corporation tax 25%The MCQ state the correct answer is $3.2
Pex=D*(i+g)/Ke-g
0.40*1.05/0.20-0.05=2.8please advice
thanks in advance
George
The dividend growth formula gives the ex div market value.
The questions says that the are about to pay a dividend, which means we need to cum div market value.
The cum div value is the ex dive value plus the dividend that is about to be paid.
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