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A company currently pays a dividend of $3.25 per share (D0 = $3.25). It is estimated...

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Finance

A company currently pays a dividend of $3.25 per share (D0 =$3.25). It is estimated that the company's dividend will grow at arate of 25% per year for the next 2 years, and then at a constantrate of 7% thereafter. The company's stock has a beta of 1.75, therisk-free rate is 4%, and the market risk premium is 6%. What isyour estimate of the stock's current price? Do not roundintermediate calculations. Round your answer to the nearestcent.

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Working Cost of equity Rf Beta Rm Rf Here Rf risk free rate 4 or 004 Rm Rf Market risk premium 6 or 006 Beta 175 Now Cost of equity 004 175    See Answer
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A company currently pays a dividend of $3.25 per share (D0 =$3.25). It is estimated that the company's dividend will grow at arate of 25% per year for the next 2 years, and then at a constantrate of 7% thereafter. The company's stock has a beta of 1.75, therisk-free rate is 4%, and the market risk premium is 6%. What isyour estimate of the stock's current price? Do not roundintermediate calculations. Round your answer to the nearestcent.

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