Home Company paid an annual dividend of RM0.90 per share this year. The company expects that the dividend will grow an a

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answerhappygod
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Home Company paid an annual dividend of RM0.90 per share this year. The company expects that the dividend will grow an a

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Home Company paid an annual dividend of RM0.90 per share thisyear. The company expects that the dividend will grow an annualrate of 15 percent for the next five years and then drop to agradual growth rate of 7 percent indefinitely. The required rate ofreturn is 10 percent and the share is currently trading atRM48.
i) Calculate the intrinsic value of the share today.
ii) Justify whether you would buy the share
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