a.XYZ ltd, a company based inMalindi paid a dividend of sh 3 per share as of last financial period and the investors required rate of return is 12%.

Required

i.Compute the value of the share if no growth in dividend is expected.(2 marks)

ii.if the above company expects a constant growth rate is dividend of 2% fill infinity determine the theoretical value of the share.(2 marks)

iii.If the some company expects a growth rate of 5% for the first two years and 3% for he next three years and then changing to 5% thereafter till infinity, compute the value of the share.(6 marks)