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A fast growth share has the first dividend (t=1) of $2.35. Dividends are then expected to...

A fast growth share has the first dividend (t=1) of $2.35. Dividends are then expected to grow at a rate of 8 percent p.a. for a further 3 years. It then will settle to a constant-growth rate of 3.0 percent. . If the required rate of return is 14 percent, what is the current price of the share? (to the nearest cent)

Select one:

a. $24.03

b. $53.84

c. $21.36

d. $26.44

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Answer #1

a. $24.03

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