3 years ago

Question 7

Business

1 answer:

elena-14-01-66 [18.8K]3 years ago

6 0

Today's share price for CCN is $16.67

Today's share price for CCN can be determined using the Gordon constant dividend growth model

The Gordon growth model is used to determine the value of the share of a firm using the value of its dividend with the assumption that the firm grows at a constant rate.

The formula of the Gordon constant dividend growth model :

price = d1 / (r - g)

d1 = next dividend to be paid = $0.50

r = cost of equity = 12%

g = growth rate = 9%

0.50 / (12% - 9%)

0.50 / 3%

0.50 / 0.03

= $16.67

A similar question was answered here: brainly.com/question/15023105?referrer=searchResults

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