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ABCDEFGHI
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Sin-Dee PLC
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Dividend policy70%
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Return on Investment (WACC)25%
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Current year profits£3,000,000
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Paid out as dividend£2,100,000
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Float (shares)100,000,000
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Dividend per share£0.0210
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Growth rate in dividends
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BASIC FORMULA g = r * b
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with rThe return on new investments
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b % of earnings retained
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g = r * b
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g = 7.50%
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1) Calculate share price
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BASIC FORMULAR = ( D / P ) + G
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REARRANGEP = D / ( R - G )
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Share priceP = 12.00%
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Yield Y=D/P17.50%
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