Finance Auckland Ltd. is growing quickly. Dividends are expected to grow at a 20% rate for the next two years, with the growth rate falling off to a constant 4.5% thereafter. The required return is 13% and the company just paid a $0.50 dividend. Q1. What is the PVo of dividend received from year 3 onwards? Q2. What is the current share price? No excel, with detailed formula please.

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter8: Basic Stock Valuation
Section: Chapter Questions
Problem 1P: Thress Industries just paid a dividend of 1.50 a share (i.e., D0 = 1.50). The dividend is expected...
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Finance
Auckland Ltd. is growing quickly. Dividends
are expected to grow at a 20% rate for the
next two years, with the growth rate falling
off to a constant 4.5% thereafter. The
required return is 13% and the company just
paid a $0.50 dividend.
Q1. What is the PVo of dividend received
from year 3 onwards?
Q2. What is the current share price?
No excel, with detailed formula please.
Transcribed Image Text:Finance Auckland Ltd. is growing quickly. Dividends are expected to grow at a 20% rate for the next two years, with the growth rate falling off to a constant 4.5% thereafter. The required return is 13% and the company just paid a $0.50 dividend. Q1. What is the PVo of dividend received from year 3 onwards? Q2. What is the current share price? No excel, with detailed formula please.
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