What should Armadillo share price be

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Question - Armadillo Engineering is a newly listed company that is expected to pay its first dividend of $2.00 in Year 5. Thereafter, the annual dividend is expected to grow at 5% p.a. for the next 5 years, until Year 10. From Year 11 onwards, the dividend is expected to grow at 2% p.a., in perpetuity. What should Armadillo's share price be, if the return required by its shareholders is 12% p.a.?

Reference no: EM132603820

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