Mummeball Co. just paid a dividend of ($3.50) per share. The company will increase its dividend by

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Mummeball Co. just paid a dividend of \($3.50\) per share. The company will increase its dividend by 15 percent next year and will then reduce its dividend growth rate by 5 percentage points per year until it reaches the industry average of 5 percent, after which the company will keep a constant growth rate, forever. If the required return on Mummeball stock is 13.75 percent, what will a share of stock sell for today?

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Fundamentals Of Corporate Finance

ISBN: 9780072313000

5th Edition

Authors: Stephen A Ross, Randolph W Westerfield

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