X shares are expected to pay a dividend of €1.2 at the end of each of the

jagguarpaw January 9, 2017 0 Comments

Question: X shares are expected to pay a dividend of €1.2 …

X shares are expected to pay a dividend of €1.2 at the end of each of the next two years, respectively.

The analyst estimates: the required rate of return to be 7%; the expected price at the end of this 2-year holding period to be €28.00. The current price is €27.00.​

Calculate the value of the shares today. Determine whether X share is overvalued, undervalued, or properly valued.