Non-Constant Growth Storico plc has just paid a dividend of 2.45 per share. The company will increase
Question:
Non-Constant Growth Storico plc has just paid a dividend of £2.45 per share. The company will increase its dividend by 20 per cent next year, and will then reduce its dividend growth rate by 5 percentage points per year until it reaches the industry average of 5 per cent dividend growth, after which the company will keep a constant growth rate forever. If the required return on Storico shares is 11 per cent, what will a share of equity sell for today?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9780077178239
3rd Edition
Authors: David Hillier, Iain Clacher, Stephen A. Ross
Question Posted: