[koffee]

Silly mistake i made on qn2. Thank u much John.

[koffee]

Hi John,
Anther qns:
At a selling price $200,demand=100,000u p.a
Demand will chg by 10,000u for every $30 chge in selling price. Fixed costs = $60,000pa, variable cost=$8 per u. My workings as follow:
200=a-(30/10,000)(100,000u)
a=500
demand funct:200=500-(30/10,000)Q
MR=MC
500-2(30/10,000)Q=8
Q=84667 (optimal qty)
thus: optimal sp =500-(30/10,000)(84667u)
=$246 (ans:$254)

[koffee]

Hi John,

Could you please help on this qns:
A company has jus paid a dividend of $0.23 per share
Shareholders are expecting the dividend to remain at $0.23 per share next year,but to increase at an average rate of 3% per annum thereafter.
Shareholder required rate of return is 12% and the rate of corporation is 25%

What will be th current market value per share?

Thank you!

[Author]

Posts