1. Lovotel Ltd, a telecommunication company, did not pay a dividend in the last financial year. However, the company has indicated that it expects to earn $4 per share in this financial year and to pay out 20% of these earnings in dividends. Financial analysts expect that Lovotels earnings per share and dividend per share will grow at a rate of 7% a year. The rate of return required by investors has been estimated at 12% per annum. Estimate the present value of the share.