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ABC Corporation is currently $55 per share. The dividends for the next four years are expected to be $1.00 for 2019, $1.12 for 2020, $1.18
ABC Corporation is currently $55 per share. The dividends for the next four years are expected to be $1.00 for 2019, $1.12 for 2020, $1.18 for 2021, and $1.24 for 2022. We forecast the price per share to be $74 at the end of 2022. If we desire a rate of return of 10%, using the Discounted Cash Flow Model, would we consider this a desirable investment? What if our required rate of return were 7%? What would we believe ABC is worth at 7%?
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