Eros Ltd's current share price is $27.88. It expects to pay a dividend of $1.97 at...

Eros Ltd's current share price is $27.88. It expects to pay a dividend of $1.97 at the end of the year. If you wish to earn a total return of 6.96%, what must the share price be at the end of the year?

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Expert Solution

Total return = (Share price at the end of the year - Current Share price + Dividend at the end of the year) / Current Share price

6.96% = (Share price at the end of the year - $27.88 + $1.97) / $27.88

6.96% * $27.88 = (Share price at the end of the year - $27.88 + $1.97)

1.94 = Share price at the end of the year - $25.91

Share price at the end of the year = $25.91 + 1.94

Share price at the end of the year = $27.85

jeff jeffy answered 2 years ago

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