Question
A company currently pays a dividend of $1.8 per share (D0 = $1.8). It is estimated that the company's dividend will grow at a rate
A company currently pays a dividend of $1.8 per share (D0 = $1.8). It is estimated that the company's dividend will grow at a rate of 19% per year for the next 2 years, and then at a constant rate of 5% thereafter. The company's stock has a beta of 1.4, the risk-free rate is 6.5%, and the market risk premium is 1.5%. What is your estimate of the stock's current price?
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
