Company Q has just paid a dividend of $1.40 per share. Its dividend is expected to grow at 5% per year perpetually. If the required return is 10%, what is the value of a share in company Q?

To calculate the value of a share in Company Q, we can use the Gordon Growth Model, also known as the Dividend Discount Model (DDM). The formula for the Gordon Growth Model is:

Value of Share = Dividend / (Required Return - Dividend Growth Rate)

Let's plug in the given values:

Dividend = $1.40
Required Return = 10% (0.10)
Dividend Growth Rate = 5% (0.05)

Using the formula, we get:

Value of Share = $1.40 / (0.10 - 0.05)

Simplifying further, we have:

Value of Share = $1.40 / 0.05

Calculating this, we find:

Value of Share = $28

Therefore, the value of a share in Company Q is $28.