Alpaca Ltd is experiencing a period of rapid growth. Earnings and dividends are expected to grow at a rate of 15% during the next two years, 13% in the third, and then at a constant rate of 4 percent thereafter. Alpaca Ltd’s last dividend, which has just been paid, was $0.25. If the required return on the shares is 8%,

what is the price of an Alpaca Ltd’s share today?

Answer rating: 100% (QA)

To calculate the price of Alpaca Ltds share today we need to use the dividend discount model which v... View the full answer