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A fast growth share has the first dividend (t=1) of $3.16. Dividends are then expected to grow at a rate of 5 percent p.a. for a further 3 years. It then will settle to a constant-growth rate of 2.6 percent. . If the required rate of return is 13 percent, what is the current price of the share? (to the nearest cent) O a. $27.38 O b. $32.19 O c. $30.38 O d. $69.53

A fast growth share has the first dividend (t=1) of $3.16. Dividends are then expected to grow at a rate of 5 percent p.a. for a further 3 years. It then will settle to a constant-growth rate of 2.6 percent. . If the required rate of return is 13 percent, what is the current price of the share? (to the nearest cent) O a. $27.38 O b. $32.19 O c. $30.38 O d. $69.53

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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A fast growth share has the first dividend (t=1) of $3.16. Dividends are then expected to grow at a rate of 5 percent p.a. for a further 3 years. It then will settle to a constant-growth rate of 2.6 percent. . If the required rate of return is 13 percent, what is the current price of the share? (to the nearest cent) O a. $27.38 O b. $32.19 c. $30.38 O d. $69.53
Transcribed Image Text:A fast growth share has the first dividend (t=1) of $3.16. Dividends are then expected to grow at a rate of 5 percent p.a. for a further 3 years. It then will settle to a constant-growth rate of 2.6 percent. . If the required rate of return is 13 percent, what is the current price of the share? (to the nearest cent) O a. $27.38 O b. $32.19 c. $30.38 O d. $69.53
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