Question
A company plans to pay the following dividends on its common stock: D 1 = $0.68 D 2 = $1.25 D 3 = $1.37 D
A company plans to pay the following dividends on its common stock:
D1 = $0.68
D2 = $1.25
D3 = $1.37
D4 = $0.88
After the fourth years, the company expects the divided growth rate to settle into a constant 3% per year indefinitely.
The required rate of return on this company's common stock is 6.8%
What is the stock's intrinsic value? Round all intermediate values to 2 decimal places.
Show Work!
| a. | $22.89 | |
| b. | $18.79 | |
| c. | $23.45 | |
| d. | $16.85 | |
| e. | $21.95 |
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Forecasting Principles And Practice
Authors: Rob J Hyndman, George Athanasopoulos
1st Edition
0987507109, 978-0987507105
