20. Vikas Engineering Ltd has current dividend per share of 5, which has been growing at an annual rate of 5 per cent. The company is expecting significant technical improvement and cost reduction in its operations, which would increase growth rate to 10 per cent. Vikas' capitalization rate is 15 per cent. You are required to calculate

(a) the value of the share assuming the current growth rate; and

(b) the value of the share if the company achieves technical improvement and cost reduction. Does the price calculated in

(b) make a logical sense? Why?