Mr Blessing Khosi is contemplating purchasing non$-$redeemable, cumulative

preference shares in Beta$-$Delta Ltd$.$ He$,$ however, wants to establish a reasonable

price to pay for each preference share. According to research performed on Beta$-$

Delta Ltd and these preferences shares, the following events are anticipated:

Each preference share will have an issue price of R$50$ attached to it$.$

The preference dividend will be $11\mathrm{.}8\%$ per annum.

The required rate of return for these preference shares is however $12\mathrm{.}1\%.$

Beta$-$Delta Ltd is planning to undertake a large project in four years time during

which Beta$-$Delta Ltd is to launch a new product line. To have sufficient finances

available to fund the product line launch, it is anticipated that Beta$-$Delta Ltd will

not pay dividends during the third and fourth year from today. In the fifth year,

Beta$-$Delta Ltd will again proceed with dividend payments. Assist Mr James Storm in

determining a reasonable price that Mr Blessing Khosi should be willing to pay

for each Beta$-$Delta Ltd preference share if the shares are purchased today.