Question
An analyst has been following American Dream stock. He projects the following dividends for the next three years: YEAR 1 2 3 Dividend $1.84 $2.43
An analyst has been following American Dream stock. He projects the following dividends for the next three years:
| YEAR | 1 | 2 | 3 |
|---|---|---|---|
| Dividend | $1.84 | $2.43 | $3.03 |
The analyst notes that American Dream stock has a required return of 10.19%. The analyst projects that dividends will grow at a constant rate of 4.00% per year after year 3.
What is the projected selling price for the stock at the end of year 3?
Answer format: Currency: Round to: 2 decimal places.
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Financial Management And Policy
Authors: James C. Van Horne
11th Edition
0137512236, 9780137512232
