Good afternoon,
I have doubts on the third exercise of the lecture 4. Why when we have to calculate P1 we add to the perpetuity formula 100 (which is the eps)? Is it linked to the concept of ex-dividend date?
Thank you in advance.
Yes, Chiara. If you hold the stock before the ex-dividend date, you still have the right to get the dividend. if you buy the stock just after the ex-dividend date, you do not have the right to collect the dividend if it has not been paid.
We add 100 because, in one day, we will get a dividend of 100.
We add 100 because, in one day, we will get a dividend of 100.