Problem: Shahid Brothers is expected to pay Rs 2 per share dividend at the end of the year.The dividend is expected to grow at a constant rate of 7 percent a year and the required rate of return on the stock is 15%.
Required:
- What is the value per share of the company's stock?
- What is the value of the share if the growth rate is 10 percent?
- If the required rate of return increases to 17 percent, while the growth rate remains at 7 percent, what would be the price of the stock