Potato milk producer Solan-Yum AB has been in business for a decade and is finally recording good profitability. The most recent pay-out of SEK3.20 per share is expected to grow at 4.5% per annum. Solan-Yum pays 7.5% interest on their 3-year bank loan and investors’ required rate of return on equity is 8%. Calculate Solan-Yum’s current share price and illustrate your approach with a timeline.

Answer rating: 100% (QA)

Here the dividend at time zero is 320 where as the growt... View the full answer