Compute what price should tbt shares be trading

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Problem 1: TheBartThe (TBT) Pty. Ltd. is a listed online entertainment company that has just paid a dividend of $2.50 per share. The dividend is expected to grow at a rate of 2% p.a. for the next 5 years, after which it should remain constant, in perpetuity. At what price should TBT's shares be trading, if its shareholders require a return of 10% p.a.?

Reference no: EM132623922

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