1.

(i)A company has issued perpetual preference shares. The company pays an annual dividend of $6.35 on this share. What is the current price of this preference share given a required rate of return of 12.1 percent p.a.? (to the nearest cent; don't include $ sign)

(ii)ABC Ltd shares are assumed to be trading at their fair value of $49.49. The dividend per share next year is $3.97 and grows at a constant rate each year. The appropriate discount rate is 17% p.a.. What is the expected price of ABC shares4 year from now? (round to nearest cent)

(iii)At the end of the year, ABC will pay a $4.02 dividend per share After that the dividend is expected to increase at a constant rate of 2% p.a. If you require a 12%p.a. return on the stock, what is the value of ABC stock? (round to the nearest cent; don't use $ sign)