BenchMark, Inc., just paid a dividend of $3.29 on its stock. The growth rate in dividends is
Question:
BenchMark, Inc., just paid a dividend of $3.29 on its stock. The growth rate in dividends is expected to be a constant 4 percent per year indefinitely. Investors require a return of 15 percent on the stock for the first three years, a return of 13 percent for the next three years, and then a return of 10 percent thereafter. What is the current share price for the stock?
Step by Step Answer:
This stock has a constant growth rate of dividends but the required return changes twice To find the ...View the full answer
Corporate Finance Core Principles And Applications
ISBN: 9781260571127
6th Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
Related Video
Constant Growth Dividend Discount Model – This dividend discount model assumes dividends grow at a fixed percentage. They are not variable and are consistent throughout. Variable Growth Dividend Discount Model or Non-Constant Growth model
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