To calculate the present value of the stream of dividends, we need to use the formula for the present value of a growing perpetuity, which is:
PV = D / (r - g)
where PV is the present value, D is the current dividend, r is the discount rate, and g is the growth rate of the dividend.
In this case, we have D = Birr 500, r = 15% per year, and g = 8% per year. We also know that the stream of dividends will last for 10 years. To calculate the present value, we can plug in the values into the formula:
PV = Birr 500 / (0.15 - 0.08) * (1 - (1 + 0.08) ^ (-10))
PV = Birr 3,618.52
Therefore, the present value of the stream of dividends is Birr 3,618.52. This means that if you were to receive Birr 500 per year for the next 10 years, and the dividends were to grow at a rate of 8% per year, the present value of those future cash flows would be Birr 3,618.52, assuming a discount rate of 15% per year.