I am having some difficulty working out the ex dividend share price using the DG Model for the given scenario. Could you please provide a breakdown of the solution?
I assume that you are referring to the question Froste?
Getting the share price is simply applying the dividend valuation formula that is given on the formula sheet. Do is $0.50 (per the question) Re is 0.124 (per the question) g = 0.52/0.50 – 1 = 0.04
Have you watched my free lectures on this, because I explain the dividend valuation model in detail, with examples. The lectures are a complete free course for Paper FM and cover everything needed to be able to pass the exam well.
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