5. The Radio Company's last dividend was $1.75 (Do = $1.75). Its dividend growth rate is...

   

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5. The Radio Company's last dividend was $1.75 (Do = $1.75). Its dividend growth rate is expected to be constant at 25% (.25) for 2 years, after which dividends are expected to grow at a rate of 6% (.06) forever. Its required return (rs) is 12% (.12). What is the current value of the stock per share if the stock sells for its equilibrium price? 5. The Radio Company's last dividend was $1.75 (Do = $1.75). Its dividend growth rate is expected to be constant at 25% (.25) for 2 years, after which dividends are expected to grow at a rate of 6% (.06) forever. Its required return (rs) is 12% (.12). What is the current value of the stock per share if the stock sells for its equilibrium price?

Answer rating: 100% (QA)

To calculate the current value of the stock per share we can use the dividend discount model DDM for... View the full answer