Question
An analyst has been following American Dream stock. He projects the following dividends for the next three years: Dividend $1.80 $2.30 $2.97 The analyst notes
An analyst has been following American Dream stock. He projects the following dividends for the next three years:
| Dividend | $1.80 | $2.30 | $2.97 |
The analyst notes that American Dream stock has a required return of 10.09%. The analyst projects that dividends will grow at a constant rate of 5.00% per year after year 3.
What is the current price of the stock if his assumptions are correct?
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Essentials Of Investments
Authors: Zvi Bodie, Alex Kane, Alan Marcus
11th Edition
1260288390, 978-1260288391
