Wizz Bang Plc. has made the following dividend payments to its shareholders:

DateDividend per share5 years ago7.004 years ago7.303 years ago7.702 years ago7.80Last year7.85This year7.90

The cost of equity (R_E) for Wizz Bang Plc. is 9.5%.

a.Based on the table given above, calculate the historical growth rate in dividends. The figures should be rounded to two decimal places. (4 marks)

b.Using the Gordon growth formula, compute the fundamental value of Wizz Bang Plc. In doing so, assume that the perpetual growth rate in dividends will be equal to the historical growth rate. The figures should be rounded to two decimal places. (4 marks)

c.Perform sensitivity analysis by varying the growth rate calculated in point (a) by increasing it up and down by one percentage point. The figures should be rounded to two decimal places. (8 marks)

d.Discuss whether dividend pricing models can be used for companies that are currently not paying dividends. (8 marks)