GraceBook is a young firm that is in the process of creating a new web-based social media platform that is focused on the corporate market. While they are unable to pay any dividends today, once corporate contracts are awarded, they expect to be able to start paying a dividend of $4.50 per share beginning two years from now (t = 2). From that point forward, as they build their reputation and capacity, they expect to be able to increase their dividend each year at a constant rate. 

If GraceBook's current stock price is $317 and their cost of equity capital (the discount rate for equity) is 13%, what is the growth rate implied by this price per share?

Answer rating: 100% (QA)

The growth rate implied by the current stock price can be calculated using the G... View the full answer