A company just started to pay dividends. Its dividend payout ratio is 30%. An analyst expected the
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Question:
A company just started to pay dividends. Its dividend payout ratio is 30%. An analyst expected the company growing fast at the following first two years at a dividend growth rate of 10% per year. After that the company will slow down to an annual growth rate of 5% forever. The company's required rate of return is 8% per annual. If the company's last annual earning is $10 per share, what's the stock price the analyst should expect now?
A.$60.63
B.$90.31
C.$71.01
D.$115.09
Posted Date: