Common stock valuation. Hatties Hat Emporium just went public at a price of $12.90 per share. They
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Common stock valuation. Hattie’s Hat Emporium just went public at a price of $12.90 per share. They do not plan to pay a dividend for the next three years but then plan to pay a special one-time dividend of $2.50 to reward their existing shareholders’ loyalty at time four. They then plan, beginning at time five, to pay a constant dividend of $0.30 for each of the following five years. Following that, they plan to increase the dividend by 3% each year for the rest of time. The firm has a required rate of return of 7.3%. What should be the current price of a share of stock?
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Applied Corporate Finance Making Value Enhancing Decisions In The Real World
ISBN: 9783030816308
2nd Edition
Authors: Mark K. Pyles
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