Use the information

below to answer question 25.

Caterpillar

Company (CTC) is a small mining company that specialises in extracting a

specific mining product that is exported to China. The company’s sales

and earnings are expected to grow at a rate of 28% for the next ten years. The

initial growth rate is expected to decline linearly over the decade, eventually

stabilising at the long-term industry growth rate of 4%. CTC has a cost of

equity of 16.4% and currently pays a regular annual dividend of R240 million.

Market

information

Calculate the estimated value per share of CTC using

the H-model.