Nvidia (NVDA) has been profitable for many years. As such, NVDA plans to pays $1.2 in...

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Nvidia (NVDA) has been profitable for many years. As such, NVDA plans to pays $1.2 in dividend next year. You think the company will be able to increase dividend by 25% for each of the next 5 years after the first dividend, then increase dividend at 15% for another 5 years. After year 12, the growth rate will be at constant rate of 10%. If your required return for NVDA is 12.8%, would you buy the stock at $300 a share? Nvidia (NVDA) has been profitable for many years. As such, NVDA plans to pays $1.2 in dividend next year. You think the company will be able to increase dividend by 25% for each of the next 5 years after the first dividend, then increase dividend at 15% for another 5 years. After year 12, the growth rate will be at constant rate of 10%. If your required return for NVDA is 12.8%, would you buy the stock at $300 a share?

Answer rating: 100% (QA)

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