The company ABC distributed a dividend of 4.0 and estimates that dividends will grow at an annual rate of 10 %over the next 5 years. For the years beyond the fifth, ABC estimates that dividends will grow forever at an annual rate of 2%. The expected return on ABC shares is 12 %.

With these data, determine: -

1. the amount of dividends estimated for each of the next five yeas -

2.the current value of the ABC share It is essential to explain the process followed and comment on the steps in the calculations