Question
A stock is expecting 4 years of non-constant growth in dividends followed by a constant growth rate in year 5 and beyond. How would you
A stock is expecting 4 years of non-constant growth in dividends followed by a constant growth rate in year 5 and beyond. How would you go about finding the value of this stock today?
Group of answer choices, one is correct
a) Find the present value of the next 4 expected dividends.
b) Find the present value of the next 4 expected dividends plus the present value of the expected year 5 constant growth stock value.
c) Find the present value of the next 4 expected dividends plus the present value of the expected year 4 constant growth stock value.
d) Find the present value of the expected year 4 constant growth stock value.
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