The earnings per share of Erratic Corporation are projected to be as follows:

End of YearEarnings

1$1.10

2$1.15

3$1.18

4$1.20

After year 4, earnings are expected to grow at a constant rate of 6% indefinitely.If the required rate of return is 12%, what would you estimate the value of Erratic's stock to be?Round your answer to the nearest dollar.

Answer rating: 100% (QA)

To estimate the value of Erratic Corporations stock using the dividend discount model DDM we need to ... View the full answer