Cullumber Mechanical Inc's first dividend of $1.40 per share is expected to be paid six years...

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Cullumber Mechanical Inc's first dividend of $1.40 per share is expected to be paid six years from today. From then on, dividends will grow by 10 percent per year for five years. After five years, the growth rate will slow to 5 percent per year in perpetuity. Assume that Cullumber's required rate of return is 16 percent. What is the price of a share of Cullumber Mechanical today? (Round present value factor calculations to 5 decimal places, e.g. 1.15612. Round other intermediate calculations to 3 decimal places, e.g. 1.156 and final answer to 2 decimal places, e.g.115.61.) Price of the stock Cullumber Mechanical Inc's first dividend of $1.40 per share is expected to be paid six years from today. From then on, dividends will grow by 10 percent per year for five years. After five years, the growth rate will slow to 5 percent per year in perpetuity. Assume that Cullumber's required rate of return is 16 percent. What is the price of a share of Cullumber Mechanical today? (Round present value factor calculations to 5 decimal places, e.g. 1.15612. Round other intermediate calculations to 3 decimal places, e.g. 1.156 and final answer to 2 decimal places, e.g.115.61.) Price of the stock

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Price of any security is the present value of the future cash that the secuity is going to genrated ... View the full answer