question archive The share of XYZ company is expected to distribute 2$ dividend a year from now, 3
The share of XYZ company is expected to distribute 2$ dividend a year from now, 3
Subject:FinancePrice:2.86 Bought3
The share of XYZ company is expected to distribute 2$ dividend a year from now, 3.5$ dividend 2 years from now and 4.5$ dividend 3 years from now. It is also expected that the share price will be equal to 60$ at the year 3. If the required rate of return on this share is 12%, what is the price right now?
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The price of the share will be calculated according to the dividend discounting model.
The price of the share will be calculated as per discounting of the dividends at the present
Price of share= (2/1.12)+(3.5/(1.12)^2+(64.5/(1.12)^5 = $ 50.48.
The price of the share of the company currently will be = $50.48.
