BBC paid a dividend of $2 per share. It is estimated that the dividend will grow at a rate of 15% per year for the next 3 years, then at a constant rate of 7% thereafter. GE has a required rate of return of 10%. What is your estimate of the current price for GE stock?

Answer rating: 100% (QA)

To estimate the current price of GE stock we can use the Gordon Growth Model also known as the Dividend Discount Model since the dividends are expecte... View the full answer