Question: (12 points) Lacy Corp., which is only five years old, has never paid a dividend. Based on your analysis, you think it will pay the
(12 points) Lacy Corp., which is only five years old, has never paid a dividend. Based on your analysis, you think it will pay the following dividends in the future: $0 one year from now $1 two years from now $2 three years from now $4 four years from now $5 five years from now Other points: You think that, immediately after the dividend at the end of the fifth year the market will estimate growth at 4% per year and will assign a required rate of return of 12%. If you buy Lacy today, you intend to hold the stock until after the payment of the dividend at the end of the 5th year. Because Lacy is not a mature company and has never paid a dividend, you require a rate of return on your 5-year investment of 27%. . a. What should be the value of Lacy immediately after the dividend at the end of the Sth year? b. What should be the value of Lacy today
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