Question 12.A.23: Assume that CDC Ltd has a constant dividend payout and the c...
Assume that CDC Ltd has a constant dividend payout and the cost of ordinary share capital is estimated at 12 per cent. Calculate the value of an ordinary share in the business using the discounted dividend approach.
The value of an ordinary share using the discounted dividend approach will be:
P_{0} = \frac{0.5 (that is, 1.0 m/2.0 m)}{0.12}
= £4.17
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