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The forecasted dividend per share in 2019 (it is 2011 in the case) is $1.21. If...

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Finance

The forecasted dividend per share in 2019 (it is 2011 in thecase) is $1.21. If the dividend per share is expected to grow by 6%each year over the period 2020 to 2024, and stabilizes to 3% eachyear forever, determine the following:

C) What is the estimated market value of equity?

discount rate = 12%

Answer & Explanation Solved by verified expert
3.5 Ratings (368 Votes)
Required rate of return Ke 12 or 012 Growth for year 2020 to 2024 1to 5 year 6 or 006 Growth from 6 year onwards 3 or 003 D1 121 D2 121 1 006 12826 D3 D2 1006 1359556 D4 D3    See Answer
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The forecasted dividend per share in 2019 (it is 2011 in thecase) is $1.21. If the dividend per share is expected to grow by 6%each year over the period 2020 to 2024, and stabilizes to 3% eachyear forever, determine the following:C) What is the estimated market value of equity?discount rate = 12%

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