Question
1. Suppose you have come up with the following dividend forecasts for the next three years. After the third year , the dividend will grow
1. Suppose you have come up with the following dividend forecasts for the next three years. After the third year, the dividend will grow at a constant rate of 10% per year and the interest rate is 15%
| Year | Expected Dividend |
| 1 | $1 |
| 2 | $2 |
| 3 | $4 |
a) Calculate the dividends in year 4 (D4)
b) Calculate the price in year 3 (P3)
c) Calculate the stocks price today(P0)
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Finance Directors Handbook
Authors: Glynis D Morris, Sonia McKay, Andrea Oates
5th Edition
1566768691, 978-1566768696
