The Felix Corp.projects to pay a dividend of €.75 next year and then have it grow at 12% for the following 3 years before growing at 8% indeﬁnitely thereafter.The equity has a required return of 10% in the market.The price of the share should be ____.

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To calculate the price of the share, we use the dividend discount model for a two-stage growth model. First, calculate the dividends for the first four years and then calculate the terminal value at the end of year 3, which will grow indefinitely at 8%.1. Dividend in Year 1: €0.752. Dividend in Year 2: €0.75 * (1 + 12%) = €0.843. Dividend in Year 3: €0.84 * (1 + 12%) = €0.944. Dividend in Year 4: €0.94 * (1 + 12%) = €1.05The terminal value at the end of year 3, which will grow indefinitely at 8%, is calculated using the formula for a perpetuity: $D_5 / (r - g)$, where $D_5$ is the dividend in year 5, $r$ is the required rate of return, and $g$ is the growth rate.5. Dividend in Year 5: €1.05 * (1 + 8%) = €1.1346. Terminal value at the end of Year 3: $€1.134 / (10\% - 8\%) = €56.70$Now, discount all future dividends and the terminal value back to present value using the required return of 10%:$$PV = \frac{€0.75}{(1+10\%)^1} + \frac{€0.84}{(1+10\%)^2} + \frac{€0.94}{(1+10\%)^3} + \frac{€1.05 + €56.70}{(1+10\%)^3}$$$$PV = €0.68 + €0.69 + €0.71 + €39.59 = €41.67$$Therefore, the price of the share should be €41.67.