Poultry Brewing Incorporated is expanding rapidly. It recently paid a dividend of $1.24 per share. This dividend is expected to grow by 18% for three years and 7% after that. With a required rate of return, r_s, of 12%, what is the current stock price?

What percentage of the current price is represented by the dividends forecast to be paid after year 4? Is the current price more reflective of dividends paid in the short- or long-term?  

Answer rating: 100% (QA)

SOLUTION To calculate the current stock price we can use the dividend discount model which states th... View the full answer