The growth per in share FCFE of CBS , Inc. is expected to be 7%/year for the next two years, followed by a growth rate of 3% /year for three years, after this five year period , the growth rate per share FCFE is expected to be 2%/year indefinitely. The required rate of return for CBS, Inc is 10 %. Last year's share FCFE was $2.00.

What should the stock sell for today?

Answer rating: 100% (QA)

To calculate the stock price today we can use the Gordon Growth Model also known as the Dividend Dis... View the full answer