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SA Fine Tuning has just paid a dividend of N$1. 20 per share. The required rate of return on equity is 22%. The future dividends are expected to be as follows, with the growth rate for year 3 being in perpetuity thereafter:
Year | 0 | 1 | 2 | 3 |
DPS (N$) | 1.20 | 1.44 | 1.73 | 1.91 |
Growth Rate |
| 20% | 20% | 10% |
The value of an ordinary share today is:
Esplanade Ltd has non-cumulative preference shares with a par value of N$2.00 and a dividend rate of 10%. The markets required rate of return on the preference share is 12%. The preference dividend has been suspended for the past two years and it is expected that dividend payments will resume two years from today. The value of an Esplanade preference share is:
Elphin Company reflects the following dividend history:
Year | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
Dividend per share (cents) | 80.00 | 69.2 | 67.4 | 62.8 | 56.2 | 48.0 |
The five-year compound average growth rate in dividends to 2025 was (to two decimal places):
Band Ltd issued debentures with a face value of N$1 000, which mature in exactly five years from today’s date. The latest interest payment has just been received. The interest is payable at 10% per annum on the face value of the debentures, on a quarterly basis. The market yield for the debentures is quoted as 12% per annum. The value of a Band Ltd debenture is: