Inc. paid its last dividend $2.00, paid yesterday. Stock analysts predict that the dividend is expected to grow indefinitely at a 6 percent rate for the next 3 years, 4% in the 4th and 5th year, and it will pay a 2% growth rate in 6th and onward to infinity. 

If you are requiring 20% annual return for A Inc., how much are you willing to pay/sell its share now?

Answer rating: 100% (QA)

AnswerWe can use the dividend discount model to calculate the present value of the stock based on it... View the full answer