What is the intrinsic value of the share

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Reference no: EM132647228

Question - Peter plans to invest in the ordinary share of Queens Ltd which is trading at $12.00 currently. From her friends, she learnt that the company will have a dividend of $1.20 per share at the next payment. Thereafter, the dividend payments is projected to grow at a rate of 5% for another two years. From the fourth year onward, Queens Ltd will adopt a constant dividend growth policy of 4% annually. If the required rate of return for Peter is 10%, what is the intrinsic value of the share?

Reference no: EM132647228

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