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A company has common stock which paid a dividend of $4 per share last year. The company expects that earnings and dividends will grow by
A company has common stock which paid a dividend of $4 per share last year. The company expects that earnings and dividends will grow by 30% for the next two years before dropping to a constant 10% growth rate afterward. The required rate of return is 14%.
a) What is the current price per share of the stock? b) What is the expected market price of the share in one year? c) Calculate the expected dividend yield at the end of the first year d) Calculate the expected capital gains yield at the end of the first year
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