Explore BrainMass

Explore BrainMass

    Value of a Share Explained in this Solution

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    ABC is expected to pay a dividend of 3.50 per share next year. Calculate the value of a share if dividends are expected to grow at 4.0%, the riskless rate is 2.0%, the expected market risk premium is 5.0%, and the company's beta is 1.20?

    © BrainMass Inc. brainmass.com June 4, 2020, 12:43 am ad1c9bdddf

    Solution Preview

    Share price according to dividend discount model
    Dividend discount model: Share price = Next year's dividend / (expected ...

    Solution Summary

    The share price is found in a few lines of reasoned calculations.