2. Consider a share that is expected to pay a growing dividend every year. The first...

Transcribed Image Text:

2. Consider a share that is expected to pay a growing dividend every year. The first dividend div =5 is due in one year. The annual growth rate during the first 3 years is g=3%, after that the dividend will grow at g=1% forever. The annual discount rate is r=4%. What is the share price today (Lecture 3)? 2. Consider a share that is expected to pay a growing dividend every year. The first dividend div =5 is due in one year. The annual growth rate during the first 3 years is g=3%, after that the dividend will grow at g=1% forever. The annual discount rate is r=4%. What is the share price today (Lecture 3)?