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What is the current value of the share for gel ltd

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Question 1: One year from today, investors anticipate that Gel Ltd. shares will pay a dividend of $2.10 per share. After that, investors believe that the dividends will grow at 20% per year for three years before settling down to a constant rate of 6% indefinitely. The required rate of return on Gel's shares is 15%. What is the current value of the share? Show workings.

Question 2: If the market price of the share is $35, is the share over-priced, under-priced or fairly-priced. Explain your answer.

Reference no: EM132523453

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