Total Marks 15
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
a What is the value per share of the company’s stock?
b What is the value of the share if the growth rate is 10 percent?
c 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