Problem:
The dividend payments for a listed company are expected to grow at 2% per year. The current dividend is $1 per share. Suppose the investors' required rate of return is 5% per annum.
(a) Calculate the intrinsic price of the share.
(b) If the market price is $35 per share, would you buy shares in the company? Explain your answer.
Additional Information:
This question basically belongs to the Finance as well as it explains about computation of intrinsic price of share and whether or not one would buy the share for $35.