Suppose you are analyzing the shares of a company. Analysts expect the company to pay dividends of $10 per share at the end of the first year, $12 per share at the end of the second year and $15 per share at the end of the third year. Thereafter, the dividend will decrease at a regular rate of 3%. If the required rate of return is 12%, what is the value of the stock today?

Answer rating: 100% (QA)

To calculate the value of the stock today we need to calculate the present value of all the expected ... View the full answer