Calculate the value of the firm shares in situations

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(i) A company paid a dividend of Dh. 15.00 per share. for the next two years, there would not be any dividend payment as the company intends to go in for major expansion programme. after 3 years, it will pay a dividend of Dh. 12 per share and thereafter the company proposes a dividend growth of 13% per annum.

(ii) if the expansion programme does not take place the company has promised to continue payment of dividend for the next two years at the present rate of 8% per annum. the return by equity shareholders is 18% and no change will occur with expansion

Calculate the value of the Firm shares in (i) and (ii) situations.

Reference no: EM131621929

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