Growth Rate = 12%
Required Rate of Return = 10 %
DDM formula:
PV = D1/ (I – g)
PV = 0.70 / (- 0.02)
PV = -35
For example per share dividend is 0.70.
I – g = 0.10 - 0.12 = -0.02
plzzzzzzzzz is ma change kar lo aur haan baki dono m aye likh do ke required rate of return ziyada hona chahie growth rate say so plzzzzzzzzzzzz change your steps and submit it pray for me ... ye bilkul sahi solution ha according to my teacher ...
Maan kool prove it wrong with reasons...On Thu, Nov 29, 2012 at 11:34 PM, MaaN Kool <usmanalikool@gmail.com> wrote:
yeh wrong solved hoye hai plz change your ideas--On Thu, Nov 29, 2012 at 7:23 PM, Hijaab <abremeherban@gmail.com> wrote:
Guys First you have to calculate Dividend per share:
Dividend per share = 15*.7=10.5
Then calculate value of D1:
D1= 10.5 * (1+0.12) =11.76
Now put the value of D1 in the formula
D1 / (r - g)
And calculate share value.
Remember me in your prayers
Regards,
Hijaab Ch
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