Tom, Jack and Harry paid a dividend of 120 cents. The dividends are expected to grow by 40% per annum during the 3-year supernormal period when the cost of equity is 30%, then grow at 20%per annum thereafter when the cost of equity is 25%.

• Calculate the value of the shares of Tom, Jack and Harry (15)
• If dividends are not expected to grow after the supernormal growth period, what will be the value of stock of Tom, Jack and Harry 

Answer rating: 100% (QA)

To calculate the value of the shares of Tom Jack and Harry during the supernormal growth period we c... View the full answer