Question: Question C2 (20 marks) (a) Virtual Teach Limited has just paid a dividend of $1.50 per share. The company is expected to have a strong

Question C2 (20 marks) (a) Virtual Teach Limited has just paid

Question C2 (20 marks) (a) Virtual Teach Limited has just paid a dividend of $1.50 per share. The company is expected to have a strong growth of 12% per annum for the next two years. However, after this two-year period, the company is expected to grow in line with the overall economy's growth of 4% per annum. If the required rate of return is 15%, what is the expected fair value of Virtual Tech's shares based upon a dividend-based model? (10 marks) (b) Discuss the pros and cons of using a dividend-based model evaluate to a stock. (10 marks)

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