Consider a firm with an expected growth rate in dividend payments of 15% per year for the
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Consider a firm with an expected growth rate in dividend payments of 15% per year for the next 6 years based on the analyst consensus forecasts that you have collected. The expected growth rate in dividend will be 5% afterwards (from year 7 onwards). The dividend that is expected to be paid next year is exactly $9 per share. Assume that the required rate of return (discount rate) on this stock is 14%. What is the stock price today?
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0133400694
1st canadian edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford, David A. Stangeland, Andras Marosi
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