F9 CBE Specimen (ACCA Website) Question 34 Section C

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August 17, 2018 at 9:36 pm #468307
neeshalrao1
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Hi John,

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?

Thank You
Neeshal
August 18, 2018 at 10:39 am #468350
John Moffat
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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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