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    cnichols33's Avatar
    cnichols33 Posts: 9, Reputation: 1
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    #1

    May 19, 2007, 08:02 PM
    Solving for Po
    Company T will pay a dividend of $1.50 per share in the next 12 months (D1). The required rate of return (Ke) is 10% and the constant growth rate is 5 percent.

    Is the correct formula and have I plugged everything in correctly?

    Po = D1/Ke - g

    = 1.50/10% - 5% = 30
    bunnyKutty's Avatar
    bunnyKutty Posts: 60, Reputation: 5
    Junior Member
    		  
    #2

    May 19, 2007, 08:08 PM
    Yes You Have Done That Correctly.
    cnichols33's Avatar
    cnichols33 Posts: 9, Reputation: 1
    New Member
    		  
    #3

    May 19, 2007, 08:33 PM
    Quote Originally Posted by cnichols33
    Company T will pay a dividend of $1.50 per share in the next 12 months (D1). The required rate of return (Ke) is 10% and the constant growth rate is 5 percent.

    Is the correct formula and have I plugged everything in correctly??

    Po = D1/Ke - g

    = 1.50/10% - 5% = 30
    Thanks So much bunnyKutty.. You really know your stuff.. Wish I did.. your help is appreciated!!

    Kindest Regards, and I look forward to reading more of your answers.. I feel confident now.. Thanks..
    bunnyKutty's Avatar
    bunnyKutty Posts: 60, Reputation: 5
    Junior Member
    		  
    #4

    May 19, 2007, 08:37 PM
    You are most welcome. Prepare well for the exams and I will help you as much as I can.
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