September 2009 Question 3

Discussion in 'CT1' started by awesomo, Jul 4, 2010.

  1. awesomo

    awesomo Member

    When calculating the dividends, where does the factor 10,000 come from?

    I'd be grateful for any help. :)
     
    awesomo, Jul 4, 2010
    #1
  2. Hamilton

    Hamilton Member

    its just to make it easier

    10000 is the number of shares chosen to give nice big numbers in the equation of value.

    its arbitrary you can see this by taking 10 shares or a hundred , we can multiply the equation of value by any scalar and we will still get the same solution for the interest rate.
     
    Hamilton, Jul 4, 2010
    #2
  3. awesomo

    awesomo Member

    Thanks, Hamilton.

    I'll attempt the question again tomorrow and let you know how it goes.
     
    awesomo, Jul 4, 2010
    #3

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