Earnings Inc. just paid a dividend of $4.05 per share. It should grow at a rate of 17% for each of the next two years, then 10% the year after and settle down to a growth rate of 5% per year thereafter. Its beta is 1.2, the market risk premium is 7.6% and T-bills trade at 2%. How much is the dividend at time 1 (D1)?

Answer rating: 100% (QA)

To calculate the dividend at time 1 D1 we need to determine th... View the full answer