It is January 2020 and Natural Company has just paid an annual dividend of $0.55 a share.
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Question:
It is January 2020 and Natural Company has just paid an annual dividend of $0.55 a share. The dividend is expected to increase by 27% in January 2021, 22% in January 2022, 15% in January 2023 and thereafter by 4% a year forever from January 2024 onwards. Investors require a 12% per annum return on Natural Company shares.
- What would a share in Natural Company be expected to sell for today (January 2020)?
Draw a timeline showing all the expected cash flows.
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9780135811603
5th Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
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