A start-up will not pay any dividends for 3 years. At the end of the third...
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A start-up will not pay any dividends for 3 years. At the end of the third year, it is expected to pay a dividend of $0.3. This dividend should then grow at a rate of 17% for 3 years, and at a reduced rate of 6% thereafter. The market required rate of return for similar high growth start-up companies is 16%. Estimate the price of the companies' shares today. [11 points] A start-up will not pay any dividends for 3 years. At the end of the third year, it is expected to pay a dividend of $0.3. This dividend should then grow at a rate of 17% for 3 years, and at a reduced rate of 6% thereafter. The market required rate of return for similar high growth start-up companies is 16%. Estimate the price of the companies' shares today. [11 points] A start-up will not pay any dividends for 3 years. At the end of the third year, it is expected to pay a dividend of $0.3. This dividend should then grow at a rate of 17% for 3 years, and at a reduced rate of 6% thereafter. The market required rate of return for similar high growth start-up companies is 16%. Estimate the price of the companies' shares today. [11 points]
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Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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