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What is a fair price for one share today

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Problem - The company has had several years of poor performance however the company has just announced a new development that return the company to profits and be able to pay dividends. The plan is that dividends will commence in 9 years' time with a dividend of $1.99 followed by $2.24 the following year and $3.9 the year after, thereafter dividends will increase by a constant rate of 4.3% p.a. indefinitely. If the required rate of return for the company is 24.7%, what is a fair price for one share today?

Reference no: EM132905510

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