Super Counting StarsCorporation paid a dividend of $1.15 per share over the last 12 months. The dividend is expected to grow at a rate of 22 percent over the next three years (supernormal growth). It will then grow at a normal, constant rate of 8.88percent for the foreseeable future. The required rate of return is 11.11 percent (this will also serve as the discount rate). Compute the current value of the stock.

Answer rating: 100% (QA)

To find the current value of the stock you will need to determine the present value of the dividends ... View the full answer