q32

Providence Lemons Ltd. has just paid a dividend of $0.80 per share on its ordinary shares. The company has been in business for ten years, and expects that the dividend will grow at 10% for the next two years, after which it is expected to grow at 3% indefinitely. You consider that the required rate of return for shares in this company is 12% per annum. The value of one share in Providence Lemons Ltd is approximately Select one: O a. $9.45 O b. $12.67 c. $11.56 d. $10.39