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What the current price of the share

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Question - A company has just paid its first dividend of $1.98. Next year's dividend is forecast to grow by 9 percent, followed by another 9 per cent growth in year two. From year three onwards dividends are expected to grow by 2.3 percent per annum, indefinitely. Investors require a rate of return of 12 percent p.a. for investments of this type. What the current price of the share?

a. $23.58

b. $21.71

c. $13.64

d. $13.02

Reference no: EM132945223

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