If the current stock price is $10.3; the contant growth rate is 3% per year and stock’s required return is 13%; and the Expected dividend in year 50 (D50) is 4.38, how much does that dividend contribute to the current stock price?
IBM Dividends 2000-9: http://www.ibm.com/investor/pdf/ibm_ir_dividends_2008_v2.pdf
A spreadsheet can help you estimate the answer to your question.
October 12th, 2009 at 9:43 pm
The companies are reducing and taking away dividend amounts, so we cannot trust dividends to contribute much to a stock price nowadays.
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October 12th, 2009 at 10:18 pm
IBM Dividends 2000-9: http://www.ibm.com/investor/pdf/ibm_ir_dividends_2008_v2.pdf
A spreadsheet can help you estimate the answer to your question.
References :
October 12th, 2009 at 10:35 pm
people would hold the stocks if the dividend is attractive, contributing to less fluctuation of the stock prices, if the company is doing well
References :