Determining the valuation of shares

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This question relates to the valuation of shares.

Ram Shack Ltd has just paid a dividend of $3.00 a share. Investors require a 13% per annum return on investments such as Ram Shack. What would a share in Ram Shack Ltd be expected to sell for today (January, 2018) if the dividend is expected to increase by 20% in January, 2019, 16% in January, 2020, 12% in January, 2021 and thereafter by 5 per cent a year forever, from January, 2022 onwards?

Reference no: EM131815162

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