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ii) VX Ltd. has historically adhered to an annual constant growth rate policy of 5% . The
company has decided however that it will only maintain this policy for one more year, after
which dividends will grow at a constant rate of 2% annually. Determine the current price of the
stock if the company paid a dividend of $1.50 at the start of this year and the rate of return in the
market is 9% . r = 9% g = 2%

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ii) VX Ltd- has historically adhered to an annual constant growth rate.pdf

  • 1. ii) VX Ltd. has historically adhered to an annual constant growth rate policy of 5% . The company has decided however that it will only maintain this policy for one more year, after which dividends will grow at a constant rate of 2% annually. Determine the current price of the stock if the company paid a dividend of $1.50 at the start of this year and the rate of return in the market is 9% . r = 9% g = 2%