DVM part 2

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September 6, 2016 at 5:42 pm #338378
dansindo
Member
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Forecast Financial information relating to the company is as follows:
Year 1
Earnings ($000)- 3000
Dividends ($000)- nil
Year 2
Earnings ($000)- 3600
Dividends ($000)- 500
Year 3
Earnings ($000)- 4300
Dividends ($000)- 1000
The company is optimistic that earnings and dividends will increase after Year 3 at a constant annual rate of 3% per year.
Calculate the value of the company using the dividend valuation model.
Pls help me solve this question. Thanks!
September 6, 2016 at 5:46 pm #338380
John Moffat
Keymaster
- Topics: 57
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You will obviously have an answer in the same place that you found the question.
So you must ask about whatever bit of the answer you are not clear about, and not simply expect me to provide a full answer!
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