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What is the current price of share

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a. Moriarty Co Ltd has been growing at a rate of 4.5% for the past 4 years, and the company's CEO expects the company to continue to grow at this rate for the next several years. The company has just paid a dividend of $2.05. If your required rate of return was 8%, what is the maximum price that you would be willing to pay for this company's shares?

b. Sherlock Ltd is planning to pay a dividend of $1.80 next year. The expected share price a year from now is $25.80. The required rate of return is 13%. Assume a constant growth, what is the current price of this share?

Reference no: EM133061946

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