Question 10.EX.4.3: Calculation of share price using the dividend growth model ...

Corporate Finance Principles and Practice [693350]

Calculation of share price using the dividend growth model

Shareholders require a 15 per cent return on their shares and a company has just paid a dividend of 80p per share. Over the past four years, the company has paid dividends of 68p, 73p, 74p and 77p per share (most recent dividend last). What is a fair price for the share using the dividend growth model?

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