Suppose that an analyst believes that Google (GOOG) will begin paying dividends in 4.00 years....
80.2K
Verified Solution
Link Copied!
Question
Finance
Suppose that an analyst believes that Google (GOOG) will begin paying dividends in 4.00 years. At that time, the analyst expects Google to have a dividend payout rate of 60.00%, while the rest of earnings will be re-invested in the business. Currently, earnings per share for the company is $36.30. Analysts expect EPS to grow at 18.00% per year for the next 4.00 years. At that time, earnings growth will slow down to 5.00% per year. If investors in Google seek a 9.00% annual return, what is the value of a share today? (assume that the analyst is correct!)
Answer & Explanation
Solved by verified expert
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!
