Question 2 A shareholder of Company B is concerned about the recent performance of the company. She has collected the fo

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Question 2 A Shareholder Of Company B Is Concerned About The Recent Performance Of The Company She Has Collected The Fo 1 (65.95 KiB) Viewed 44 times

Question 2 A shareholder of Company B is concerned about the recent performance of the company. She has collected the following financial information. Year to 31 December 2019 2020 2021 Revenue in £'m 9.4 9.6 10.2 Earnings per share in pence 62.3 67.4 59.4 Dividend per share in pence 34.6 35.6 37.41 Closing ex-dividend share price in £1 7.2 7.9 6.6 CAPM expected return (%) 10 12 9 The finance director of Company B proposes that it will pay no dividend in 2022, 2023 and 2024. The company will pay a dividend per share of 62 pence in 2025. It will then grow at 4% per year in 2026 and beyond. The expected cost of equity of Company B is 10% per year for 2022 and onward. Dividend is paid at the end of each year.