Four years ago, Nopay Inc. paid a dividend of $$0\mathrm{.}80$ per share. Today Nopay paid a dividend of S$1\mathrm{.}66$ per share. It is expected that the company will pay dividends growing at this same rate for the next $5$ years. Thereafter, the growth rate will level off at $8\%$ per year. The current stock price is $$30.$ If the required return on this stock remains at $18\%,$ should you buy the stock$2.$

Answer rating: 100% (QA)

To determine whether to buy the stock we can use the Dividend Discount Model DDM to calculate the in... View the full answer