An ordinary share is expected to pay a dividend of $1 in one year, $4 in 2 years and $5 in 3 years. The annual dividend then remains unchanged at $5 until the end of year 10. From the end of year 10, the dividend will grow at 3% p.a. forever. Which of the following can be used to find the share price today if the rate of return is 12%? (There may be more than one correct answer. You will lose marks by choosing a wrong answer. The minimum mark for the question is zero.)

Select one or more:

An ordinary share is expected to pay a dividend of $1 in one year, $4 in 2 years and $5 in 3 years. The annual dividend then remains unchanged at $5 until the end of year 10. From the end of year 10, the dividend will grow at 3% p.a. forever. Which of the following can be used to find the share price today if the rate of return is 12%? (There may be more than one correct answer. You will lose marks by choosing a wrong answer. The minimum mark for the question is zero.) Select one or more: 0 C. a. None of the options can be used to find the share price today. 1 4 5 5 b. + + (1 1.12-7)(1.12)-2 + (1.12)-9 1.12 1.122 0.12 0.12 0.03 1 4 5 5(1.03) + + (1 1.12-8)(1.12)-3 + (1.12)-11 1.12 1.122 0.12 0.12 0.03 1 4 5 5(1.03) d. + + (1 1.12-8) + 1.12 1.122 0.12 0.12 0.03 1 4 5 5(1.03) e. + + (1 1.12-7)(1.12)-2 + (1.12)-10 1.12 1.122 0.12 0.12 - 0.03 1 4 5(1.03) f. + + (1 1.12-8)(1.12)-2 + (1.12)-10 1.12 1.122 0.12 0.12 0.03 0