Question 1

The Fijians holdings limited last dividend was $1.25 and the directors expect to maintain the historic 4

percent annual rate of growth .You plan to purchase

the stock today because you feel that the growth

rate will increase to 7 percent for the next three years and the stock will then reach $25.00 per share.

1.

How much should you be willing to pay for the stock if you require a 16 percent return