A dividend of 800,000 has just been paid. The company expects that this dividend will increase to 850,000 next year and continue to grow at this rate for the following four years (years 2-5). In year 6, it is expected that the growth rate will fall to 4% because of company investment plans. The company has 1.5 million 1 authorised shares of which 1 million have been issued. Shareholders expect a return of 12% on their investment. The company has also recently issued a bond with a nominal value of 500,000. The bond has an annual coupon rate of 5% and a maturity of 5 years. Current market rates are 8%.

How to calculate the current share price