1. Cherry Auto Sales just opened and does not expect to pay a dividend during its first...
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Question:
- 1. Cherry Auto Sales just opened and does not expect to pay a dividend during its first year. At the end of its second year, Cherry's owners expect to pay a $2.00 dividend and plan to increase it 7% annually. If the required return is 20%, what should Cherry's stock price be?
Please explain in details how did we got from the first price of 15.38 to 12.82. supplement each step with statements explaining the step.
Related Book For
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr
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