Determining the australian securities exchange

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Bondi Beachwear Ltd (BBL) shares are listed on the Australian Securities Exchange. Due to poor trading conditions BBL has not paid a dividend since a $0.50 payment four years ago. BBL has just announced a restructure and they confidently expect to resume paying dividends two years from now. The dividend in two years' time is forecast to be $0.60. In three years the dividend is forecast to be $0.75 and then predicted to increase at a constant rate of 3% p.a. indefinitely. If the required rate of return for BBL is 13% p.a., what is a fair value for BBL today?

Reference no: EM131520187

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