Specimen paper

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December 5, 2014 at 5:04 am #217775
mehreen245
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Can you please help me with the 14th mcq? Thanx
December 5, 2014 at 7:55 am #217816
John Moffat
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Average growth is (cube root of 36/31.1) – 1 = 0.05 (or 5%)

Re is 12%
Do is 36

So using the dividend growth model gives (36(1.05))/(0.12-0.05) = 540 (or $5.40 per share)
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