Kalvin SA pays dividends that are expected to grow at 7 per cent each year. These will
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Kalvin SA pays dividends that are expected to grow at 7 per cent each year. These will stop in year 5, at which point the company will pay out all its earnings as dividends. Next year’s dividend is €10 and its EPS at the time will be €15. If the appropriate discount rate on Kalvin shares is 9 per cent, what is its share price today? (20 marks)
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