Warwic Company just paid a dividend of $4.00. You expect the dividend to grow by 3%...
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Warwic Company just paid a dividend of $4.00. You expect the dividend to grow by 3% this year, 4% next year and 6% the following year. You have determined the required rate of return on this stock should be 15%. The stock's current market price is $62. What would the terminal growth rate in years four and beyond need to be to justify this price? Warwic Company just paid a dividend of $4.00. You expect the dividend to grow by 3% this year, 4% next year and 6% the following year. You have determined the required rate of return on this stock should be 15%. The stock's current market price is $62. What would the terminal growth rate in years four and beyond need to be to justify this price?
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To determine the terminal growth rate in years four and beyond that would justify the current stock ... View the full answer
Related Book For
Financial Management Theory and Practice
ISBN: 978-1305632295
15th edition
Authors: Eugene F. Brigham, Michael C. Ehrhardt
Posted Date:
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