Question
A company currently pays a dividend of $1.25per share (D0= $1.25). It is estimated that the company's dividend will grow at a rate of 17%
A company currently pays a dividend of $1.25per share (D0= $1.25). It is estimated that the company's dividend will grow at a rate of 17% per year for the next 2 years, and then at a constant rate of 5% thereafter. The company's stock has a beta of 1.45, the risk-free rate is 7%, and the market risk premium is 4%. What is your estimate of the stock's current price?
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International financial management
Authors: Jeff Madura
13th edition
978-1337099738, 1337099732, 9781337515894, 1337515892, 978-1337587211
