Question: drinder corp has declared that will offer dividends per share of $1.50 one year from now $2.00 tow years from now and $1.75 three years

drinder corp has declared that will offer dividends per share of $1.50 one year from now $2.00 tow years from now and $1.75 three years from now. you belive that you can sell the stock at the end of the third year for $42.00 oer share. According to the dividend discount model, what should the current value of this stock be if you require a 24% rate of return?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Drinder corp has declared that will offer dividend per share of 1.50 one year from now, 2 two year from now 1.75 three years from now you believe that you can sell the stock at the end of the third...

Managerial accounting is more than recording, maintaining and reporting financial results. Managerial accountants must provide managers with both financial and nonfinancial information including...

pls help solve it all Pre-Assessment Checklist: Task 3 - Project The purpose of this checklist The pre-assessment checklist helps students determine if they are ready for assessment. The...

Refer to the following: Target Corporation in Appendix B, Walmart Incorporated in Appendix C, and the Industry Ratio Report in Appendix D. Required: 1. Compute the current ratio for both companies....

Q17 You want to evaluate three mutual funds using the information ratio measure for performance evaluation. The risk-free return during the sample period is 4%, and the average return on the market...

Intelligent Toys, Inc (ITI) is a well establish toys trading company which adopts the periodic system. ITI prepares its financial statements on a monthly basis. The trial balance of ITI as at 28...

intelligent toys, inc (iti) is a well establish toys trading company which adopts the periodic system. iti prepares its financial statements on a monthly basis. the trial balance of iti as at 28...

Intelligent Toys, Inc (ITI) is a well establish toys trading company which adopts the periodic system. ITI prepares its financial statements on a monthly basis Already the best quality of photos i...

An FI has purchased a two-year, $1,000 par value zero-coupon bond for $867.43. The FI will hold the bond to maturity unless it needs to sell the bond at the end of one year for liquidity purposes....

How would you describe the significance of Rodney Adkinss work as a manager? Who benefits from his abilities and efforts?

The Futures markets is useful for price discovery, or obtaining the market s forecast of the spot exchange rate at different future dates. However, the forward market is not good for that purpose...

Avery Co. constructed a building. Construction began on January 1 and was completed on December 31 of 2020. To help pay for construction, the company obtained a $500,000 specific construction loan on...