Dividend on its perpetual preference share

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1) You are interested in investing in a company that expects to grow steadily at an annual rate of 5 percent for the foreseeable future. The company just paid a dividend of $1.70. If your required rate of return is 13 percent p.a., what is the most you would be willing to pay for this Round to the nearest cent; don't use $ sign.)

2) Each quarter, a company pays a dividend on its perpetual preference share. Today, the share is selling at $16.89. If the required rate of return for such shares is 9.2 percent p.a. , what is the quarterly dividend paid by this company? ; don't include $ sign)

3) ABC Limited will pay a $5.41 dividend next year (t=1) on its ordinary shares. The shares are currently selling at $58.18 per share. What is the market's required return on this investment if the dividend is expected to grow at 3% forever? (as a percentage to nearest two decimal places; don't use % sign)

Reference no: EM132388603

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