What is the intrinsic worth of share


Response to the following problem:

Melissa Popp is thinking about buying some shares of Education Pty Ltd at $50 per share. She expects the price of the shares to rise to $75 over the next three years. During that time she also expects to receive annual dividends of $5 per share.

a. What is the intrinsic worth of this share, given a 10% required rate of return?

b. What is its expected return?

 

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Financial Accounting: What is the intrinsic worth of share
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