Next year’s dividend is €3.00. Thereafter dividends change by 6.00% each year forever. The required return is 18.00%.
- A.Calculate today’s share price.
Next year’s dividend is €3.00. Thereafter dividends change by 6.00% each year forever. The required return is 18.00%.
€25.00.
The dividend due in one year is 2.40 per share. Dividends grow at 9.000% indefinitely and the required return is 15.000%.
Price = 40.00.
Odin has just paid a dividend of $2.40 per share. Dividends are expected to grow at 10% indefinitely. Shareholders require a return of 16%.
Value per share = $44.00.
The $2.40 dividend has already been paid and is not a future cash flow to a buyer today. Gordon’s formula discounts the stream beginning with D₁. It requires rₑ > g.
The dividend just paid is 2.35 per share. Dividends grow at 7.000% indefinitely and the required return is 12.000%.
Price = 50.29.
The dividend due in one year is 4.00 per share. Dividends grow at -15.000% indefinitely and the required return is 15.000%.
Price = 13.33.
Next year’s dividend is €1.08. Thereafter dividends change by -10.00% each year forever. The required return is 14.00%.
€4.50.
Ford has just paid a dividend of €2. Dividends grow at 5% forever, and investors require 11%.
P₀ = €35.00; P₃ = €40.52; P₁₅ = €72.76.
A dividend of $5 is due tomorrow. Subsequent annual dividends decline by 5% a year. The required return is 10%. Ignore one day of discounting.
Cum-dividend price ≈ $36.67; ex-dividend price ≈ $31.67.
The imminent payment is a separate cash flow. Treating it as a dividend one year away gives a different timing assumption.