The current stock price of TransContinental Airways is $65 per share. TCA currently pays an annual per-share

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The current stock price of TransContinental Airways is $65 per share. TCA currently pays an annual per-share dividend of $3. Over the past five years this dividend has grown annually at a rate of 23%. A respected analyst assumes that the current growth rate of dividends will hold up for the next five years, after which dividend growth will slow to 5% annually. Use the TwoStageGordon function to compute the cost of equity.

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Financial Modeling

ISBN: 9780253337825

5th Edition

Authors: Simon Benninga, Tal Mofkadi

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