A stock currently pays a dividend of $2 00 per share The company is expected to grow dividends 30 next year and 20 the following year before dividend growth settles down to a long term average rate of 4 per year Estimate the intrinsic value per share if the required return on the stock is 12 ...

The intrinsic value of the stock equals the present value of ...

A stock currently pays a dividend of $2.00 per share. The company is expected to grow dividends

Question:

A stock currently pays a of $2.00 per share. The company is expected to grow dividends 30% next year and 20% the following year before growth settles down to a long-term average rate of 4% per year. Estimate the intrinsic value per share if the required return on the stock is 12%.
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...