ABC common stock is expected to have extraordinary growth in earnings and dividends of 20% per year for 2 years, after which the growth rate
ABC common stock is expected to have extraordinary growth in earnings and dividends of 20% per year for 2 years, after which the growth rate will settle into a constant 6%. If the discount rate is 15% and the most recent dividend was $2.50, what should be the approximate current share price?
- $31.16
- $33.23
- $37.39
- $47.77
Step by Step Solution
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Step: 1
Most recent dividend D0 250 growth rate for 2 years 20 So D1 250120 ...
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Authors: Donald R. Askeland, Wendelin J. Wright
3rd edition
978-1111576868, 1111576866, 978-1285677620, 1285677625, 978-1111576851
