Question: 7. Current forecasts for Leopard Limited is to pay dividends over the next four years, as follows: Year 1 2 3 Dividends $0.50 $0.64 $0.78

7. Current forecasts for Leopard Limited is to pay dividends over the next four years, as follows: Year 1 2 3 Dividends $0.50 $0.64 $0.78 At the end of three years you anticipate selling the stock at a market price of $12.50. (1) Compute the current price of the stock given a 12% discount rate? (ii) Suppose that Leopard Limited shares is currently trading at $11.20 would you buy the stock? Explain. 8. The share price of Silver Ltd is currently $5.40 and the last dividend was $0.35. The analyst is predicting an annual dividend growth rate of 3.00% and the required rate of return is 9%. (1) Compute the fair value of Silver Ltd using the Gordon Growth model. (ii) Would you buy Silver Ltd's shares based on the Gordon Growth model? Provide your reasoning

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