Hello friends,I am studying SFM and will be posting my queries and questions in t
his thread.Hopefully someone can answer them.Others can post their queries too
My first question is from Dividend Policy.Here's the question :
A Ltd. and B ltd are two companies.The most recent dividend paid by these two is Rs.1.8 per share and the required rate of return for both companies is 11%.The intrinsic value of share of A ltd. is Rs.34.12.The dividends of B ltd. are expected to grow at 8% annually for 3 years and 'X'% thereafter till infinity.The price of share of A ltd. is greater than the price of share of B ltd. by Rs.7.60.
Find the value of X
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