We are here with you hands in hands to facilitate your learning & don't appreciate the idea of copying or replicating solutions. Read More>>
+ Link For Assignments, GDBs & Online Quizzes Solution
+ Link For Past Papers, Solved MCQs, Short Notes & More
Dear Students! Share your Assignments / GDBs / Quizzes files as you receive in your LMS, So it can be discussed/solved timely. Add Discussion
How to Add New Discussion in Study Group ? Step By Step Guide Click Here.
ABC corporation stock is selling for Rs. 150 per share according to Karachi stock exchange market summary. A rumor about the company has been heard that the firm will make an exciting new product announcement next week. By studying the industry, it is being concluded that this new product will support a growth rate of 20% in dividend for two years. After that it is expected that the growth rate in dividend will decline to 6% and remains same onwards. The firm currently pays an annual dividend of Rs. 4.
The rate of return on stocks like ABC corporation is 10%.
I. Find out the values for D1, D2 and D3 (8 Marks)
II. What will be the price of stock (P2) at the end of year 2? (4 Marks)
III. What will be the present value (P0) of stock? (6 Marks)
IV. Should we buy stocks of ABC Corporation at Rs. 150? (2 Marks)
You are required to show each step involved and complete calculations for each part of
question because calculations carry reasonable marks.
.+ http://bit.ly/vucodes (Link for Assignments, GDBs & Online Quizzes Solution)
+ http://bit.ly/papersvu (Link for Past Papers, Solved MCQs, Short Notes & More)+ Click Here to Search (Looking For something at vustudents.ning.com?) + Click Here To Join (Our facebook study Group)