Popcorn company is expected to pay $1 dividend per share at the end of this year, $1.50
Fantastic news! We've Found the answer you've been seeking!
Question:
Popcorn company is expected to pay $1 dividend per share at the end of this year, $1.50 dividend per share at the end of year 2, $2 dividend per share at the end of year 3, and $2.50 dividend per share at the end of year 4. After that, the dividends are expected to grow at a constant rate of 5% forever. Suppose that the required rate of return is 10%. What is the intrinsic / fair value of the stock today? If the stock is currently trading at $64, is it correctly priced? Please show work
Posted Date: