Due to unfavorable economic conditions, EFB Company's earnings and dividends are expected to remain unchanged for the next 3 years. After 3 years, dividends are expected to grow at a 10% annual rate forever. The last dividend was $2, and the required rate of return is 20%. 

What should be the current market value of EFB stock?

Answer rating: 100% (QA)

Current Dividend D0 2 For the next three years dividends wont change Hence D1 2 D2 2 ... View the full answer