INFORMATION The market value of a Fitch Limited ordinary share is R60. The dividend at the end of the previous year was R9 and the expected growth rate in dividends is 10% p.a.

Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter15: Capital Investment Analysis
Section: Chapter Questions
Problem 15.1.2MBA
Question

Use the Gordon Growth Model to estimate the cost of the ordinary shares (expressed as a percentage to two decimal places) from the information provided attached.

INFORMATION
The market value of a Fitch Limited ordinary share is R60. The dividend at the end of the previous year was
R9 and the expected growth rate in dividends is 10% p.a.
Transcribed Image Text:INFORMATION The market value of a Fitch Limited ordinary share is R60. The dividend at the end of the previous year was R9 and the expected growth rate in dividends is 10% p.a.
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