The Dubai Ice Park LLC has been witnessing good sales in the last few quarters of its operations. The firms upper management seriously believes that shareholders should be rewarded. As a result, the firm is expected to increase dividends by 5% in one year and by another 8% in two years, and by another 12% in three years. After that, dividends will increase at a rate of 4% per year indefinitely.

(a) If the last dividend paid was $75 and the required return is 25%, how much IMG would be worth today using the Dividend Discount Model? [4 marks]

(b) Evaluate the impact on the firms value if the management decided to change the dividend growth rate in year 4 to 8% indefinitely. [2 marks]

(c) Recommend 2 alternative financial tools which a shareholder might use when deciding whether or not to buy a stock. [2 marks]