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Homework answers / question archive / What is the value of a share that has been paying $2 dividends with no growth prospects, and a required rate of return of 10%?
What is the value of a share that has been paying $2 dividends with no growth prospects, and a required rate of return of 10%?
The value is computed as shown below:
= Dividend / required rate of return
= $ 2 / 0.10
= $ 20