Transcribed Image Text
Assume that the average firm in your company's industry isexpected to grow at a constant rate of 5% and that its dividendyield is 8%. Your company is about as risky as the average firm inthe industry and just paid a dividend (D0) of $1.25. Youexpect that the growth rate of dividends will be 50% during thefirst year (g0,1 = 50%) and 20% during the second year(g1,2 = 20%). After Year 2, dividend growth will beconstant at 5%. What is the estimated value per share of yourfirm’s stock? Do not round intermediate calculations. Round youranswer to the nearest cent.
Other questions asked by students
Basic Math
Statistics
Q
Illustration 8 On 15th March, 2001 O.P. Ltd. purchased Rs 1,00,000, 9% Government Stock (interest...
Accounting
Accounting
Accounting
Accounting