Question: a. Moriarty Co Ltd has been growing at a rate of 5.5% for the past 4 years, and the company's CEO expects the company to
a. Moriarty Co Ltd has been growing at a rate of 5.5% for the past 4 years, and the company's CEO expects the company to continue to grow at this rate for the next several years. The company has just paid a dividend of $1.05. If your required rate of return was 11%, what is the maximum price that you would be willing to pay for this company's shares? (round to 2 d.p) (3 marks) b. Sherlock Ltd is planning to pay a dividend of $1.05 next year. The expected share price a year from now is $34.20 The required rate of return is 11%. Assume a constant growth, what is the current price of this share? (round to 2 dp) (4 marks)
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