Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. carnes cosmetics co.'s stock price is $60, and it

Carnes Cosmetics Co.'s stock price is $60, and it recently paid a $3.00 dividend. This dividend...

60.1K

Verified Solution

Question

Finance

Carnes Cosmetics Co.'s stock price is $60, and it recently paida $3.00 dividend. This dividend is expected to grow by 21% for thenext 3 years, then grow forever at a constant rate, g; and rs =15%. At what constant rate is the stock expected to grow after Year3? Do not round intermediate calculations. Round your answer to twodecimal places.

Answer & Explanation Solved by verified expert
4.5 Ratings (872 Votes)
D0 3 D1 D0 x 1g 3 x 121 363 D2 D1 x 1g 363 x 121 43923 D3 D2 x 1g 43923 x 121 5314683 D4 D3 x 1g 5314683 x 1g Price of share in year 3 P3 can be computed using dividend discount model as P3    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

Carnes Cosmetics Co.'s stock price is $60, and it recently paida $3.00 dividend. This dividend is expected to grow by 21% for thenext 3 years, then grow forever at a constant rate, g; and rs =15%. At what constant rate is the stock expected to grow after Year3? Do not round intermediate calculations. Round your answer to twodecimal places.

Other questions asked by students

Q

Intro to Python! 1. Using while loops, write a program that prints multiples of 5 which are...

Programming
Q

Can money buy happiness? See what Daniel Gilbert has to say about it, and then discuss...

Psychology
Q

The United States is involved with each organization on the list in aid to contributing...

Biology
Q

In a uniform magnetic field a ring is rotating about its axis which is parallel...

Physics
Q

In(1/200)Step 1Apply the logarithmic property, In(a/b) = In(a) In(b), to simplify. In(1/200)=ln ) -...

Calculus
Q

19 22 Guess the value of the limit if it exists by evaluating the function...

Calculus
Q

Using financial statements below. Wal-Mart has significant commitments under operating leases. If these agreements had...

Accounting
Q

Hobart Company manufactures patio umbrellas. The direct labor standard for each umbrella is 1.25 direct...

Accounting
Q

A. What is the break-even point in units? B. What is the companys income if...

Accounting
Q

31) Cougar Company had the following balances and transactions during 2019: Beginning Merchandise Inventory 120...

Accounting
Q

What are the disadvantages of decentralizing operations for organizations? a. Loss of team...

Accounting
Q

Stock A has more systematic risk than stock B, stock B has more unsystematic risk...

Finance