Question
A company just paid a dividend of $1.60 per share. You expect the dividend to grow 11% over the next year and 8% two years
A company just paid a dividend of $1.60 per share. You expect the dividend to grow 11% over the next year and 8% two years from now. After two years, you have estimated that the dividend will continue to grow indefinitely at the rate of 4% per year. If the required rate of return is 9% per year, what would be a fair price for this stock today? (Answer to the nearest penny.)
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Get StartedRecommended Textbook for
Intermediate Financial Management
Authors: Brigham, Daves
10th Edition
978-1439051764, 1111783659, 9780324594690, 1439051763, 9781111783655, 324594690, 978-1111021573
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