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A) ZGW LLC will pay the following dividends over the next 4 years: Year Dividend 1 $13 on 2 $16 3 4 $19 $24
A) ZGW LLC will pay the following dividends over the next 4 years: Year Dividend 1 $13 on 2 $16 3 4 $19 $24 Time left 1:5 The stock is expected to sell for $96 at the end of 4 years. If you want to earn a return of 12% on this investment, what is the maximum price you would pay? (12 Marks) B) Assume the stock will grow at a constant rat 6 percent after Year 4 and you require 13.5 percent on the stock. Using the infinite period DDM, how much would you pay for this stock? (8 Marks)
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