TechLink is currently experiencing rapid growth. It is expected that dividends are going to increase by...
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TechLink is currently experiencing rapid growth. It is expected that dividends are going to increase by 8% each year in the coming six years, and at a rate of 3% per year thereafter. Techlink just paid a dividend of $2 today. The required return is 12%. a. What is the price of the stock today? b. However, later today, Techlink announced that due to a delay in one of their projects, dividends are no longer going to increase by 8% each year in coming six years, and at a rate of 3% per year thereafter. Instead, they are going to now distribute $2 in the first year, $2 in the second year, $2.2 in the third year, $2.5 in the fourth year. Thereafter, dividends would grow 4% every year. Suppose the required return remains at 12%, what is the price of the stock today? TechLink is currently experiencing rapid growth. It is expected that dividends are going to increase by 8% each year in the coming six years, and at a rate of 3% per year thereafter. Techlink just paid a dividend of $2 today. The required return is 12%. a. What is the price of the stock today? b. However, later today, Techlink announced that due to a delay in one of their projects, dividends are no longer going to increase by 8% each year in coming six years, and at a rate of 3% per year thereafter. Instead, they are going to now distribute $2 in the first year, $2 in the second year, $2.2 in the third year, $2.5 in the fourth year. Thereafter, dividends would grow 4% every year. Suppose the required return remains at 12%, what is the price of the stock today?
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a Price of the Stock Today To find the price of the stock today we can use the dividend discount mod... View the full answer
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Posted Date:
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