PT Perwira earned $15/share last year and paid a dividend of $8/share. Next year, you...
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Accounting
PT Perwira earned $15/share last year and paid a dividend of $8/share. Next year, you expect PT Perwira to earn $16 and continue its payout ratio.
a. Assume that you expect to sell stock for $150 a year from now. If you need 10% for this stock, how much will you pay for the payment?
b. If you expect the selling price to be $120 and get an 11% return on the investment, how much would you pay for PT Perwira shares?
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