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Hello Tutor, for past year paper June 2010 Q4 part(b)(ii) QSX CO
Why the examiner answer just calculate the “Share price = 70/(0·1 – 0·03) = 1,000c ” but not include the Three year time which is not growth which is “to pay a dividend of 70c per share in 2013 ” , then 70cent of dividend should be discount back in year 0? (70 / 1.10^3)?
Thank you.
But in the following line in the examiners answer, he does discount the price back for 3 years!!
No I mean why the answer doesn’t like the June 2012 Q4(b),which have Year 3 PV of dividends after year 3 + Year 3 PV of dividends as the 3 percentage growth only after 3 years? (Which discount the dividend in year 3 -[70cents/1.10^3])(no growth)
Thank you.
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