Question
A company currently pays a dividend of $3.2per share (D0= $3.2). It is estimated that the company's dividend will grow at a rate of 20%
A company currently pays a dividend of $3.2per share (D0= $3.2). It is estimated that the company's dividend will grow at a rate of 20% per year for the next 2 years, and then at a constant rate of 8% thereafter. The company's stock has a beta of 1.7, the risk-free rate is 7%, and the market risk premium is 4%. What is your estimate of the stock's current price?
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Principles of Finance
Authors: Scott Besley, Eugene F. Brigham
5th edition
1111527369, 978-1111527365
