Question
A company currently pays a dividend of $4 per share (D 0 = $4). It is estimated that the company's dividend will grow at a
A company currently pays a dividend of $4 per share (D0 = $4). It is estimated that the company's dividend will grow at a rate of 23% per year for the next 2 years, and then at a constant rate of 6% thereafter. The company's stock has a beta of 1.6, the risk-free rate is 6.5%, and the market risk premium is 3%.
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Derivatives Markets
Authors: Robert McDonald
3rd Edition
978-9332536746, 9789332536746
