1. How much should you be willing to pay for Pi Mobile company stock if the company last paid a dividend of $ 4.5 and you feel that a 5.5 percent growth rate can be maintained indefinitely? You require a 10.5 percent return.
2. The Pi Mobile company stock last paid a dividend of $ 4.5 and will pay constant dividend forever and you feel that a 0 percent growth rate can be maintained. You require a 10.5 percent return p.a. Discuss present value of the growth opportunity of the company.