Question
3. Compute the value of a share of common stock of a company whose expected dividend next year is $2.50 and is expected to grow
3. Compute the value of a share of common stock of a company whose expected dividend next year is $2.50 and is expected to grow at 3 percent per year for the next 5 years, after which the dividend growth rate will increase to 6 percent per year indefinitely. Assume a 12 percent required rate of return.
4.. A stock had the following prices and dividends.
Year Price Dividend 1. $23.19 - 2. $24.90 $.23 3. $23.18 $.24 4. $24.86 $.25
Required: a) What is the yearly return on this stock? b) What is the average return on this stock? c) What is the risk of this stock?
Please no excel I need formulas to do workings on paper
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