Problem:
Start Up Plc is expected to pay a dividend of £4.75 per share at the end of year 1 and these dividends are expected to grow at a constant rate of 3.5% per year forever.
Required:
Question: If the required rate of return on the stock (and all stocks of the same risk class) is 12%, what is the current value of the stock today?
Note: Provide thorough explanation of the given question.