Bidii Constructions Company is a real estate firm located in Machakos County. The firm is expected to maintain a constant dividend payout ratio of 60 percent and a constant annual growth rate in earnings of 3 percent for the foreseeable future. In a recent financial year, the company recorded a net income attributable to ordinary shareholders of Sh. 25 million and the company has one million shares issued and outstanding. Ordinary shareholders require a minimum return of 8 percent

Required:

(i) Using appropriate dividend valuation Model, determine the value per share and the total value of equity

(ii) Assume that flamingo just acquired another company in the same business and as result; its earnings will grow rapidly over the next four years at an annual rate of 10 percent before assuming a constant annual growth rate. Determine the value per share and the total value of equity