Question
A company currently pays a dividend of $2 per share. It is estimated that the company's dividend will grow at a rate of20% per year
A company currently pays a dividend of $2 per share. It is estimated that the company's dividend will grow at a rate of20% per year for the next two years, and then at a constant rate of 7% thereafter. The company's stock has a beta of 1.2, the risk-free rate is 7.5% and the expected market return is 14%. What is your estimate of the stock's current price?
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Mathematical Control Theory And Finance
Authors: Andrey Sarychev, Albert Shiryaev, Manuel Guerra, Maria Do Rosário Grossinho
2008th Edition
3540695311, 978-3540695318
