Forever 21 is expected to pay an annual dividend of $3.77 per share in one year,...

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Forever 21 is expected to pay an annual dividend of $3.77 per share in one year, which is then expected to grow by 10% per year. The required rate of return is 14%. Part 1 What is the current stock price? Part 2 What is the current stock price if the annual dividend of $3.77 has just been paid? (i.e. paid yesterday or earlier today) Part 3 What is the current stock price if the annual dividend of $3.77 his about to be paid? (i.e. paid tomorrow or later today) Forever 21 is expected to pay an annual dividend of $3.77 per share in one year, which is then expected to grow by 10% per year. The required rate of return is 14%. Part 1 What is the current stock price? Part 2 What is the current stock price if the annual dividend of $3.77 has just been paid? (i.e. paid yesterday or earlier today) Part 3 What is the current stock price if the annual dividend of $3.77 his about to be paid? (i.e. paid tomorrow or later today)

Answer rating: 100% (QA)

To calculate the current stock price in different scenarios we can use the dividend discount model D... View the full answer