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A company has just paid out a dividend of $1.47. The next annual dividend is due...

A company has just paid out a dividend of $1.47. The next annual dividend is due in on year. Dividends are expected to rise by 20% per year until t=5. Thereafter they are expected to fall by 5% each year.

a. What is the share price if the required return on shares is 11%?

b. What is the share price expected to be in 20 years immediately before the dividend is paid?

c. Why would anyone buy the share after five years if the dividend is expected to fall thereafter?

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