ABC Limited recently listed on the Johannesburg Stock Exchange (JSE) and expects to pay a maiden...

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ABC Limited recently listed on the Johannesburg Stock Exchange (JSE) and expects to pay a maiden annual dividend of R1.50 per share three years from today. Dividends are then expected to grow at 10% per year for the subsequent four years, and eventually grow at 5% per year for the foreseeable future. Investors believe that the expected rate of return on ABC Limited shares is 15%. Required: 2.1 What is the maximum price a rational investor would pay for each ABC Limited share today? Round off your answer to two decimal places. 2.2 Two rational investors are interested in buying shares in the same company. The first investor plans to sell the shares in three years' time, while the second investor plans to sell the shares in five years' time. The investors have the same expectations of future dividends. Discuss whether the investors will arrive at the same value for the shares today. ABC Limited recently listed on the Johannesburg Stock Exchange (JSE) and expects to pay a maiden annual dividend of R1.50 per share three years from today. Dividends are then expected to grow at 10% per year for the subsequent four years, and eventually grow at 5% per year for the foreseeable future. Investors believe that the expected rate of return on ABC Limited shares is 15%. Required: 2.1 What is the maximum price a rational investor would pay for each ABC Limited share today? Round off your answer to two decimal places. 2.2 Two rational investors are interested in buying shares in the same company. The first investor plans to sell the shares in three years' time, while the second investor plans to sell the shares in five years' time. The investors have the same expectations of future dividends. Discuss whether the investors will arrive at the same value for the shares today.