A stock will pay no dividends for the next 3 years. Four years from now, the stock is expected to pay its first dividend in
A stock will pay no dividends for the next 3 years. Four years from now, the stock is expected to pay its first dividend in the amount of $2.3. It is expected to pay a dividend of $3.1 exactly five years from now. The dividend is expected to grow at a rate of 9% per year forever after that point. The required return on the stock is 12%. The stock's estimated price per share exactly TWO years from now, P2 , should be $______. Do not round any intermediate work, but round your final answer to 2 decimal places (ex: $12.34567 should be entered as 12.35).
Step by Step Solution
There are 3 Steps involved in it
Step: 1
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started