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CFA Level 2
Equity Investments

Valuation of XYZ Corporation using Discounted Dividend Valuation

Very Easy Equity Valuation Applications Discounted Dividend Valuation

XYZ Corporation is a stable company that has consistently paid dividends to its shareholders over the years. The most recent dividend paid by XYZ was $2.00 per share, and the company is expected to grow its dividends at a rate of 5% per year indefinitely. If an investor requires a 10% return on their investment, what is the value of one share of XYZ Corporation using the Gordon Growth Model?

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