Apple, a leading technilogy company, issues stocks to finance the development of one of its products. Profit growth in the first, second and third years is expected to be 6%, 8%, 10% annually, respectively, after which it will grow steadily at 6%. The last dividend paid was $12 per share. Calculate the fair value of the common stock if the investor's required rate of return is 10%.

 

Answer rating: 100% (QA)

To calculate the fair value of the common stock of Apple we can use the Dividend Discount Model DDM ... View the full answer