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A company recently paid a dividend of $1.20 per share. It is estimated that the company's...

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Finance

A company recently paid a dividend of $1.20 per share. It isestimated that the company's dividend will grow at the rate of 15%per year for the next 5 years, then at a constant rate of 7% a yearthereafter. The required return on this company is 8.80%. What isthe estimated stock price today?

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As per dividend discount model current price of stock is the present value of future dividends Step1Calculate present value of dividend of next 5 years Year    See Answer
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A company recently paid a dividend of $1.20 per share. It isestimated that the company's dividend will grow at the rate of 15%per year for the next 5 years, then at a constant rate of 7% a yearthereafter. The required return on this company is 8.80%. What isthe estimated stock price today?

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