Question
1. Kingsway Electronics Inc. is expecting a period of intense growth and has decided to increase the annual dividend by 25% a year for
1. Kingsway Electronics Inc. is expecting a period of intense growth and has decided to increase the annual dividend by 25% a year for the next three years. After that they will maintain a constant growth rate of 6% per year. Last year, the company paid $2.35 as the annual dividend per share. What is the current price of this stock if the required rate of return is 10%? (10 marks)
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Financial Institutions Management A Risk Management Approach
Authors: Marcia Cornett, Patricia McGraw, Anthony Saunders
8th edition
978-0078034800, 78034809, 978-0071051590
