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ABC Industries is expected to enjoy a very rapid growth rate in dividends of 30 percent a year for the next 3 years. This growth
ABC Industries is expected to enjoy a very rapid growth rate in dividends of 30 percent a year for the next 3 years. This growth rate is then expected to slow to 20 percent a year for the next 5 years. After that time, the growth rate is expected to be 6 percent a year. D0 is $2. The beta for this stock is 1.5. The expected return on the market is 11 percent, and the risk free rate is 5 percent. The required rate of return is 20 percent. What is the estimated price of the stock?
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