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10-16 Assume that Camille's Jewelry Corporation recently paid an annual dividend of $2.00 per share (or DC) on its common stock. Because of exceptionally positive
10-16 Assume that Camille's Jewelry Corporation recently paid an annual dividend of $2.00 per share (or DC) on its common stock. Because of exceptionally positive operating results, the firm expects dividends to grow at a supernormal growth rate of 20 percent (or gs) over the next three years. After the end of the three-year supernormal growth period, dividend growth is expected to return to the firm's normal rate of 6 percent (or gn). The investor's required return for Camille's Jewelry Corporation common stock is 12 percent (or Ke). Using the two-stage growth model solve for the firm's current stock price (or PO)
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