Question
A. A company pays a dividend of $3 today, the company expects to grow at 4% forever and the required rate of return is 10%.
A. A company pays a dividend of $3 today, the company expects to grow at 4% forever and the required rate of return is 10%. What is the value of the stock today? what is the value in 5 years? what is the dividend yield? what is the capital gain yield?
For the first part I solved it and got $52.00, I need help solving for the value in 5 years.
B. A company pays a dividend of $1.50 today. The company has a required rate of return of 14% and the dividend is expected to be $1.50 per year forever. What is the value of the stock today? what is the value in 5 years? what is the dividend yield? what is the capital gain yield?
Please explain how to do.
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