Question
A firm has just paid a dividend of $1.8 per share. The dividend is expected to grow at 10.4% per year for two years and
A firm has just paid a dividend of $1.8 per share. The dividend is expected to grow at 10.4% per year for two years and then grow at a constant rate of 2.6% per year in perpetuity. The cost of equity is 8.5%. What is the value of each share?
a.$37.19
b.$33.56
c.$35.54
d.$36.10
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Personal Finance
Authors: Jeff Madura
5th edition
132994348, 978-0132994347
