Assume you require 13.5% return. A company has common stock which just paid a dividend of $2.76 (at moment 0). Dividends forecast to grow 72% for the upcoming five years (years 1-5). After year 5, the growth of the stock's dividends is expected to change to a sustainable rate of 3.4% forever. What is price is predicted for this stock at the end of year 5 (i.e., what is the terminal value)?

Answer rating: 100% (QA)

To calculate the terminal value of the stock at the end of year 5 you can use the Gor... View the full answer