Question: Space Tech Ltd. is expected to pay a per-share dividend next year of $30. The markets consensus is that the firm's dividend growth rate of

Space Tech Ltd. is expected to pay a per-share dividend next

Space Tech Ltd. is expected to pay a per-share dividend next year of $30. The markets consensus is that the firm's dividend growth rate of 2% per year (which has been going on for many years) will be maintained in the foreseeable future. SpaceTech's cost of equity is 10% per year. i) What is the price of a share of SpaceTech? (3 marks) SpaceTech has the expected dividend growth of 2% because its return on equity is 8% and management retains 25% of the earnings. ii) What is the earnings per share of SpaceTech next year? (2 marks) iii) What is the present value of growth opportunities per share of SpaceTech

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