FBS 210 Revison

Acres Development Ltd's historic earnings per share has been as follows: 2019 R15.00 2018 R13.20 2017 R11.50 2016 R 9.60 It is company policy to pay 40% of earnings as a dividend to ordinary shareholders. The company expects that dividends will grow at the current growth rate for the next two years. Due to economic uncertainty dividends will grow for the following three years thereafter at a constant rate of 12% per year, where after growth will decrease to a constant growth rate of 6% for the future. The company's required rate of return is 14%. REQUIRED: Calculate the present value of Acres Development Ltd's ordinary shares