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How much should you be willing to pay for the Sunny Apple stock if the...

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Accounting

How much should you be willing to pay for the Sunny Apple stock if the company last paid a dividend of $ 4.2 and you feel that a 10.2 percent growth rate p.a. can be maintained indefinitely? You require a 15.5 percent return p.a.


The Sunny Apple last paid a dividend of $ 4.2 and will pay constant dividend forever and you feel that a 0 percent growth rate can be maintained. You require a 15.5 percent return.


 Discuss what is value of the growth opportunity of Sunny Apple company.

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