To find the current share price, we need to calculate the present value of the dividends the company will pay over the next 15 years. The present value of a series of future cash flows can be calculated using the formula:
PV = CF1 / (1 + r)^1 + CF2 / (1 + r)^2 + … + CFn / (1 + r)^n
where PV is the present value, CF is the cash flow at a given time period, r is the required return, and n is the number of time periods.
Plugging in the given values, we get:
PV = $8.45 / (1 + 0.13)^1 + $8.45 / (1 + 0.13)^2 + … + $8.45 / (1 + 0.13)^15
= $8.45 / 1.13 + $8.45 / (1.13)^2 + … + $8.45 / (1.13)^15
= $7.50 + $6.68 + $5.93 + $5.24 + $4.61 + $4.04 + $3.52 + $3.04 + $2.61 + $2.21 + $1.85 + $1.51 + $1.20 + $0.92 + $0.67
= $52.77
So the current share price is $52.77.
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