Telus, a Canadian wireless communications company, earned $2.38 per share in 2015 and paid dividends of $156

Question:

Telus, a Canadian wireless communications company, earned $2.38 per share in 2015 and paid dividends of $156 per share. Analysts fore cast an annual earnings growth rate of 7.63% for the next 5 years. Based on similar-risk companies, the estimated required rate of return on Telus stock is 8.9%. It is assumed that after 2020 onward, Telus will maintain its current reinvestment rate but earn only its on new investments. Estimate Telus' current stock price at the beginning of 2016.
Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...