Assume that XYZ Industries had earnings this year of $4 per share and always pays out 40

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Assume that XYZ Industries had earnings this year of $4 per share and always pays out 40 percent in dividends. Analysts predict that ZZ Top's earnings will grow at a 3 percent rate forever. What number would you use for next year's dividend (D₁) if you were to use the Dividend Discount Model to price this stock?

Posted Date: May 15, 2024 01:29 PM

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Assume that XYZ Industries had earnings this year of $4 per share and always pays out 40

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To calculate the next years dividend D1 using the Dividend Disco... View the full answer

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