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Lily owns shares in Patina Constructions Pty Ltd . Currently, the market price of the share is $ 3 0 . 3 1 . The

Lily owns shares in Patina Constructions Pty Ltd. Currently, the market price of the share is $30.31. The company expects to grow at a constant rate of 4 per cent for the foreseeable future. Its last dividend was worth $3.125. Kaitlins required rate of return for such shares is 13.35 per cent. She wants to find out whether she should sell her shares or add to her holdings.
a. What is the maximum price that you would be willing to pay for this share? (round to 2 d.p)
b. Based on your answer to part a, should Lily buy additional shares in Patina Constructions? Why or why not?
c. What is the share price in 4 years if the growth rate increases to 5% after 4 years? (round to 2 d.p)

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