Gce Model Questions Vol1 2021 Commerce Question 46
Practice objective / multiple choice question 46 from the 2021 Gce Model Questions Vol1 Commerce examination.
A share is currently priced at ₦150 and pays an annual dividend of ₦5. The dividend is expected to grow at \(4\%\) per year indefinitely. An investor wishes to hold the share for exactly three years and then sell it, expecting the selling price to reflect the same growth rate. She wants an annualised return of at least \(8\%\) (the current yield on a government bond). What is the greatest price, in naira, she should be prepared to pay for the share today to meet this target? Give your answer to the nearest naira.
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About This Question
This is Gce Model Questions Vol1 2021 Commerce Question 46. It is one of the objective questions from the 2021 Gce Model Questions Vol1 Commerce examination.
Difficulty level: Hard .
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