What is the expected dividend growth rate for Engro

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QUESTIONS -

1) In September of 2004, Microsoft, Inc. was trading at $27.29 per share. At that time, Microsoft was paying an annual dividend of $0.32 per share, which is double its 2003 dividend of $0.16 per share. If this trend is expected to continue, what is the required return on Microsoft?

2) Suppose the dividends of ABC Co. for first three years are expected to have a growth rate of 8%, 10% and 12% respectively and after which the dividend will grow at a constant rate of 4% forever. The last dividend the Co. paid was Rs.1/=. What price you will be willing to pay for the share of ABC Co. if your required rate of return is 9%?

3) Engro is selling at Rs.220 per share. The most recent annual dividend paid was Rs. 9. Using the Gordon Growth model, if the market requires a return of 13%, what is the expected dividend growth rate for Engro?

Reference no: EM133014922

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