[itskatiegreen]

Hi, I am confused on the top one also. I’ve worked out the growth rate and got to the final formula which I think should be:

re = (Do (1+g)/ Po) + g

so: 0.5 x 1.167/4.5 + 0.167 = 29.67%

but the answer has it as: 0.5 x 1.167 / (4.50 – 0.50) + 0.167 = 31.3%

How was I supposed to know to deduct the dividend?

[itskatiegreen]

I’ve found the BPP question book to be a easier than the actual exam. BPP seem to word the questions so that you understand exactly what they want you to do whereas in the exam they use much more complex language and it can really catch you out if you’ve solely used the BPP questions for practise.

[Author]

Posts