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Calculate an estimate of the current price of vornado

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Stoddart plc is a company that has patent rights for a new mobile phone technology that is expected to enable it to generate growth in earnings of 15% for the next 4 years. After that (from the start of year 5) the company expects to see earnings growth drop to a constant rate of 7%. Assuming that the company pays out 30% of earnings as dividends and that the last dividend payment made by the company was £5, calculate an estimate of the current price of Vornado. Assume the required return on equity is 10%.

Reference no: EM132685124

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