Question
A stock just paid a cash dividend of $2.20 per share. It is expected to grow at 15% per year for the next 5 years.
A stock just paid a cash dividend of $2.20 per share. It is expected to grow at 15% per year for the next 5 years. After that, the growth will stabilize at 4% per year forever. The required return is 12%.
A. Calculate the price of the stock in 5 years.
B. Calculate the price of the stock today.
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
15th edition
1337671002, 978-1337395250
