Dividend Valuation Model June 2013, Q4 , Part a

This topic has 2 replies, 2 voices, and was last updated 11 years ago by John Moffat.

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June 4, 2015 at 5:07 pm #253163
ddowney
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Hi John,

In the answer to Q4 , a The examiner valued the equity at 50M at year 2 and 42.1M at year 0. Why did he work back using 1.09 to the power of 2 to get the 42.1M?
June 4, 2015 at 5:22 pm #253185
ddowney
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John,

Apologies, I understand it to be worked backwards based on the cost of equity of 9%. If this is the case, then I understand.
June 4, 2015 at 6:34 pm #253289
John Moffat
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Yes – that is the reason 🙂

(and you do not ever need to apologise 🙂 )
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