Question
9. 2k21 Holdings Ltd wants to develop a capsule hotel in Brampton and will use all its earnings for the next two years to reinvest
9. 2k21 Holdings Ltd wants to develop a capsule hotel in Brampton and will use all its earnings for the next two years to reinvest in operations. It will therefore not pay dividends for the next 2 years. However, in year 3 it intends to pay a $0.80/share dividend and they expect it to grow at 20% a year for the following two years (years 4 and 5). After that growth in dividends is expected to stabilize at 4% indefinitely. The stocks required rate of return is 11%. What is 2k21 Holdings stock value at present?
Current price of stock (P0) = $/share
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