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BF Ltd anticipates growth over the next few years with the following dividends forecast for the next 4 years. Year Expected Dividend 1 $1.50 2
BF Ltd anticipates growth over the next few years with the following dividends forecast for the next 4 years.
Year | Expected Dividend |
1 | $1.50 |
2 | $2.86 |
3 | $3.75 |
4 | $5.25 |
5 | ? |
After the year 4 dividend is paid, future dividends are expected to grow at a constant growth rate of 5% indefinitely.
If the required return is 10 %, what is the current share price? (5 marks)
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