(a) X Ltd has just paid a dividend of 1.2 per share. Dividends are expected to grow at a

rate of 3% for 3 years and at a rate of 2% thereafter forever. The appropriate discount

rate for CW shares is 10%. What is the current value of one share of X?

(b) At retirement, 5 years from now, Bill will have the option of receiving a lump sum

of 200,000 or 24 equal monthly payments, with the first payment made at retirement.

Assuming an annual rate of return of 6% on retirement investments, what is the monthly

payment Bill would need to be indifferent between the two choices?