Mike works for a prominent technology company. His company just paid a $1.50 dividend per share. The
Question:
Mike works for a prominent technology company. His company just paid a $1.50 dividend per share. The required return for his company’s stock is 12%.
(Input all answers as positive values, no commas, with no symbols ex. no $ or %. Input all % answers as whole numbers without symbols ex. 10.03 for .1003. Input all final answers two decimal places out.)
22. Mike’s company has decided to increase the company’s dividend by 6% forever, on an annual basis starting with the next dividend. If this is the case, what will the value of the dividend be in year 8? (Hint: D0=$1.50; g=6%)
Given the growth information from problem 22 and the required rate of return of 12%, what is the price of the stock today? (Hint: Constant Dividend Growth Stock; D0=$1.50)
Fundamentals Of Corporate Finance
ISBN: 9781265553609
13th Edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan