A dividend was just paid out by a French publicly traded firm. The dividend (assume t=0 on
Question:
A dividend was just paid out by a French publicly traded firm.
The dividend (assume t=0 on the timeline) was in the amount of €4.26/share.This cash has been paid out and is no longer part of the firm's value and stock price. This firm is expected to make annual dividend payments forever.
Calculate/estimate the current price or value per share of this stock if its equity cost of capital or required return is r=9% per year, and the dividends will increase or grow at a constant annual rate of g=4.5%/year forever?
Hint: Pay special attention to exactly when the given dividends are paid; t=0 or t=1, etc, and don't round any intermediate steps to any less than four decimal places, e.g., 0.01285?
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta