Suppose the company can maintain a high growth rate of 30% for 3 years, then the growth rate will reduce to the sustainable growth rate. The discount rate is 20%, how much will be the stock price today? How much will be stock price one year from now? (Assuming there are 10 millions of shares outstanding).

Answer rating: 100% (QA)

To calculate the stock price today and one year from now well need to make use of the sustainable growth rate formula and discount the future cash flo... View the full answer