Question
A company currently pays a dividend of $2 per share ( D 0 = $2).It is estimated that the companys dividend will grow at a
A company currently pays a dividend of $2 per share (D0 = $2).It is estimated that the companys dividend will grow at a rate of 20% per year for the next 2 years, then at a constant rate of 7% thereafter.The companys stock has a beta of 1.2, the risk free rate is 7.5%, and the market risk premium is 4%.What is your estimate of the stocks current price?
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Foundations Of Finance
Authors: Arthur J Keown, John D Martin, J William Petty
7th Edition
0133370356, 9780133370355
