Calculate the present value of the share

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Reference no: EM131904271

The last dividend of company ABC was £6. Dividends of company ABC are now growing at a rate of 20 per cent per annum. The required rate of return for companies with comparable risk is 10 per cent per annum. It is assumed that the period of fast growth will last for 4 years. After that the company will grow at a normal rate of 8 per cent per annum. Calculate the present value of the ABC share.

Reference no: EM131904271

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