Question: I need help with this question in 10 min please A financial analyst has been following Fast Start Inc., a new high-growth company She estimates
A financial analyst has been following Fast Start Inc., a new high-growth company She estimates that the current risk-free rate is 5 percent, the market risk premium 6.25 percent, and that Fast Start's beta is 1.75. The current earnings per share EPSO) is $2.50. The company has a 40 percent payout ratio. The analyst estimates that the company's dividend will grow at a rate of 25 percent this year, 20 percent next year and 15 percent the following year. After three years the dividend is expected to grow at a constant rate of 7 percent a year. The company is expected to maintain its current payout ratio. The analyst believes that the stock is fairly priced. What is the current price of the stock? $18.53 $20.65 $16.93 17.33
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