S
Srijan Ghosh
Member
Module 12
Example 12.11
A French invester who is taxed at 35% on income ,have just purchased 500 shares in a small education company ex-dividends. Dividends are paid annually and a next dividend is due in 1 month time .last dividend was 8 per share and expecte rise by 4 %pa. Calculate the price paid by the invester ,expected yield is 12%.
Sol:- 500×8(1-0.35)(1.04+v1.04^2+v^2*1.04^3.................)
Shouldn't this be the present value in one months time in the book it is given. 500×8(1-0.35)(1.04^2+v1.04^3+v^2*1.04^4.................)
Please can anyone explain y ....
THANK YOU
Example 12.11
A French invester who is taxed at 35% on income ,have just purchased 500 shares in a small education company ex-dividends. Dividends are paid annually and a next dividend is due in 1 month time .last dividend was 8 per share and expecte rise by 4 %pa. Calculate the price paid by the invester ,expected yield is 12%.
Sol:- 500×8(1-0.35)(1.04+v1.04^2+v^2*1.04^3.................)
Shouldn't this be the present value in one months time in the book it is given. 500×8(1-0.35)(1.04^2+v1.04^3+v^2*1.04^4.................)
Please can anyone explain y ....
THANK YOU