Question

Staton-Smith Software is a new up-start company and will not pay dividends for the first five years of operation. It will then institute an annual cash dividend policy of $2.50 with a constant growth rate of 5% with the first dividend at the end of year six. The company will be in business for 25 years total. What is the price of this stock if an investor wants
a. a 10% return?
b. a 15% return?
c. a 20% return?
d. a 40% return?



$1.99
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  • CreatedMay 08, 2014
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