BBB has a steady dividend of $2.00 and be maintained indefinitely. Currently their cost of capital is 5%, and they expect that they can lock into that cost for the next 2 years. Cost of capital will increase to 8% and remain at that level for 2 years. In year 5 they will be subject to a 10% cost of capital, which is expected to hold indefinitely.

Find the Value of BBB's stock in years 3 and 5 and find the value of stock today.

Answer rating: 100% (QA)

To calculate the value of BBBs stock in years 3 and 5 and the value of the stock today we need to us... View the full answer