A company currently pays a dividend of $1.4 per share (D 0 = $1.4). It is estimated
Fantastic news! We've Found the answer you've been seeking!
Question:
A company currently pays a dividend of $1.4 per share (D0 = $1.4). It is estimated that the company's dividend will grow at a rate of 20% per year for the next 2 years, and then at a constant rate of 8% thereafter. The company's stock has a beta of 1.1, the risk-free rate is 6.5%, and the market risk premium is 3.5%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent.
$
Related Book For
Financial management theory and practice
ISBN: 978-0324422696
12th Edition
Authors: Eugene F. Brigham and Michael C. Ehrhardt
Posted Date: