Verizon paid a dividend of $3 per share yesterday. The company announced that they plan to...

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Verizon paid a dividend of $3 per share yesterday. The company announced that they plan to increase their dividend by $1 per share for each of the next three years ($4 a year from now, $5 two years from now, and $6 three years from now). After that, they plan to keep their dividend at $6 per share forever. The variance of Verizon's stock is .49, the variance of the market is .0625, and the correlation between Verizon's stock and the market is 0.4. The risk-free rate is 3.0% and the market-risk premium is 5.7%. Verizon has 100 million shares of stock outstanding and $50 million of debt. The YTM for its debt is 8.0%. Use the dividend discount model to find the price per share of Verizon's stock. Price of Verizon's stock Verizon paid a dividend of $3 per share yesterday. The company announced that they plan to increase their dividend by $1 per share for each of the next three years ($4 a year from now, $5 two years from now, and $6 three years from now). After that, they plan to keep their dividend at $6 per share forever. The variance of Verizon's stock is .49, the variance of the market is .0625, and the correlation between Verizon's stock and the market is 0.4. The risk-free rate is 3.0% and the market-risk premium is 5.7%. Verizon has 100 million shares of stock outstanding and $50 million of debt. The YTM for its debt is 8.0%. Use the dividend discount model to find the price per share of Verizon's stock. Price of Verizon's stock

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To find the price per share of Verizons stock using the dividend discount model we need to calculate ... View the full answer