A common share paid a dividend of $1.00 per share five years ago. The dividend paid yesterday was $1.22. If dividend growth continues at its historical rate, what will be the value of the common shares six years from today? Investors require a return of 10% on investments of this level of risk.© BrainMass Inc. brainmass.com March 4, 2021, 6:03 pm ad1c9bdddf
The growth Rate for dividend (g) = (1.22/1.00)^(1/5) - 1
=0.04057 or ...
This solution helps entails formulas and computations to value common shares.