Calculate the value of one share in tented

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Tented plc has developed a new tent which has had great reviews in the camping press. The company paid a dividend of 10p per share recently and the next is due in one year. Dividends are expected to rise by 20% percent for the next five years while the company exploits its technological and marketing lead. After this periode however, the growth rate will revert to only 7% per year. The rate of return on risk-free securities is 7% and the risk premium on the average share has been 5%. Tented is in a systematic risk class which means that its beta is 1.5.

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Calculate the value of one share in Tented plc

Reference no: EM131051075

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