Question

Grandiose Growth has a dividend growth rate of 20%. The discount rate is 10%. The end-of-year
dividend will be $2 per share.
a. What is the present value of the dividend to be paid in year 1? Year 2? Year 3?
b. Could anyone rationally expect this growth rate to continue indefinitely?
Dividend growth rate .. 20.00%
Discount rate...... 10.00%
End-of-year dividend .. $2.00



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  • CreatedSeptember 19, 2013
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