Question
ABC's stock just paid a quarterly dividend of $1.39 per share (d0 = 1.39). ABC's dividends are expected to grow at a rate of 4%
ABC's stock just paid a quarterly dividend of $1.39 per share (d0 = 1.39). ABC's dividends are expected to grow at a rate of 4% APR compounded quarterly over the next 6 years, and then remain constant (zero-growth) forever after that point in time. Using the dividend discount model, what is the price of the stock today if the required return is 12% APR compounded quarterly?
Three months from today, a stock is expected to pay a quarterly dividend of d1 = $0.52. Using the dividend discount model, what is the price of this stock today if investors require a return of 18% APR compounded quarterly, and investors believe the dividend will forever grow at a rate of 9% APR compounded quarterly?
please answer both and show formula
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