Firm last paid a dividend of 120 cents. The dividends are expected to grow by 14% during the first 3 years of super normal growth when cost of equity is 20%. Thereafter, dividends grow at a rate of 20% when cost of equity is 30%. Calculate the price of the share.
c) Oasis Energy is considering raising capital to finance the $500million dollar Hydro electric project in Kariba. They are considering borrowing at, 9% $300million, issue 10 000 000 ordinary shares at $10 each and the balance will be from available retained earnings from previous years. The required rateof return by shareholders is 8%. Corporation tax (T) is 25%. Advice the firm on measures to reduce the weighted average cost of capital.