Earnings per common share of ABC Industries for the current year are expected to be $3 and

Question:

Earnings per common share of ABC Industries for the current year are expected to be $3 and to grow 10% per year over the next 4 years. At the end of the 5 years, earnings growth rate is expected to fall to 5% and continue at that rate for the foreseeable future. ABC's payout ratio is 40%. If the on ABC's common shares is 15%, calculate the current share price.
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... Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...