Question: b) A share is expected to pay its first dividend of $1.20 in three years. After that, the dividend will remain unchanged for the foreseeable

b) A share is expected to pay its first dividend of

b) A share is expected to pay its first dividend of $1.20 in three years. After that, the dividend will remain unchanged for the foreseeable future. An investor requires a rate of return of 6% p.a. Using the dividend discount model (DDM), calculate the maximum price the investor should pay for this share. (Round your answer to the nearest cent.) (2 marks)

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