Page 28 - F2 Integrated Workbook STUDENT 2019
P. 28
Chapter 2
2.3 DVM with constant growth
d o (1 + g)
K e = + g
P o
kₑ = cost of equity
dₒ = current dividend
Pₒ = ex div market price of a share (ex div = AFTER dividend paid)
g = constant rate of growth in dividends
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