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The company dividend payment in year 2012 to 2016 are as follow. Company share in issue is 6m
Years
Dividend (‘000)
2012-500
2013-425
2014-275
2015-300
2016-850
Current share price is 2/shares.
What is cost of equity?
Please do not set me test questions like this. You must have an answer in the same book in which you found the question, and so ask about whatever it is in the answer that you are not clear about and then I will help you.
This is all explained in my free lectures. You need to calculate the annual dividend growth, and then use this in the dividend valuation formula to calculate the cost of equity.
Please watch the free lectures – they are a complete free course for Paper FM and cover everything needed to be able to pass the exam well.
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