If the formula(s) is/are
Price = D (1+G) / R - G
Market Value of share = D/R
D = the dividend R = return on equity G = growth rate
nominal value £0.65 current market value ££67.31
current level of dividend is £0.61 grows at a compound rate of 8.9% per year
What is the cost of ordinary shares?
As you can see I dont have a return on equity, so ive tried using Market Value of share = D/R and flipping it to get R = D/Market Value of share.
My answers are somtimes in the negative or too low.
All calculations are per share basis
Dividend Yield Approach:
Cost of Ordinary Share $= \frac{D_0(1+g)}{MV} + g$
Cost of Ordinary Share $= \frac{0.61(1+0.089)}{67.31} + 0.089$
Cost of Ordinary Share $ = 0.0988691$