[Yeo]

Dear Mr.John,
Quiz 2(a)
Please let me know whether I am completely wrong if i calculate dividend growth model using historical information:

(In $’000)
Dividends for year 2014 : $13,200 x 40% = $5,280
Dividends for year 2015 : $13,840 x 41.4% = $5,730

DGM = (5730/5280) – 1 = 8.5%

Market value = (5730*1.085/(0.125-0.085) =$155,426

[Author]

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