Assume Smiley Inc. will pay a dividend of $5 per share at the end of Year 1
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Assume Smiley Inc. will pay a dividend of $5 per share at the end of Year 1 after which dividends will grow at a constant rate of 3% forever. Smiley has a cost of equity of 10%. If you value the firm at $100 per share using the Gordon growth model, how many years worth of dividends constitute one half of the stock's value?
Related Book For
Fundamentals of Investment Management
ISBN: 978-0078034626
10th edition
Authors: Geoffrey Hirt, Stanley Block
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