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The dividends of YXY Ltd are expected to grow at a rate of 15%, 10%...

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Finance

The dividends of YXY Ltd are expected to grow at a rate of 15%, 10% and 10% p.a. during years 1 through 3 respectively. After that, the dividends are expected to grow at a long-run rate of 5% p.a. forever. The companys current dividend per share is $1.50 and the required rate of return on the shares is 12% p.a. Based on this information, the current price should be closest to:

$22.28

$28.32.

$26.82.

$31.31.

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