Question 2 TX Ltd has just paid a dividend of $1 per share. Dividends are...
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Question 2 TX Ltd has just paid a dividend of $1 per share. Dividends are expected to grow at 5% per annum for the future. Its shares are trading at $20. An efficient 11% return is expected. (a) Is the market appraising the risk of the stock right? Should you now recommend buy or 'sell' on the stock? (5 marks) (6) TX Ltd specialises in medical research. It has just announced that it is in the final stage of clinical trials for the only pandemic vaccine in the world. Its shares shot up to $25 a share post announcement. Dividend growth is set to double for the future and the long- term view that 11% return on the stock is fair. Given this new scenario, discuss how will your recommendation change from part (a)
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