1.

(i)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)

(ii)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)