Navel County Choppers, Inc., is experiencing rapid growth. The company expects dividends to grow at 18 percent

Question:

Navel County Choppers, Inc., is experiencing rapid growth. The company expects dividends to grow at 18 percent per year for the next 11 years before leveling off at 4 percent into perpetuity. The required return on the company’s stock is 10 percent. If the dividend per share just paid was $1.94, what is the stock price?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...

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