A stock has a steady 5% growth rate in dividends. The required rate of return for stocks of this risk class is 15%. Expected EPS next year is $3. The dividend payout ratio is expected to remain stable at 30%. What is the value? If the current price is 12, what recommendation (buy/hold/sell) would you issue?

Answer rating: 100% (QA)

As per dividend growth model Price of stock Expe... View the full answer