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5. You are considering to buy stocks of a new firm NNN. The firm just paid dividends $1 per share. The dividend payment is expected
5. You are considering to buy stocks of a new firm NNN. The firm just paid dividends $1 per share. The dividend payment is expected to increase by 25% in the first two years, 10% in the following two years, afterwards 3% forever. Your required return is 10%. What is the maximum price you are willing to pay? What is the value of D1? What is the value of D4? In which year, growth rate becomes constant? (fill with integer, for example, in year 3, fill "3") In the first step, you can compute price from constant growth rate at which period? (fill with integer, for example, can compute price in year 3, fill "3") What is the maximum price you are willing to pay? (Answer format: keep 2 digits after decimal point and no dollar sign. e.g., 1.456 >> 1.46)
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