Question
An investor thinks a company will pay dividends of $3, $4, $5, $6, and $7 over the next five years. After that the growth rate
An investor thinks a company will pay dividends of $3, $4, $5, $6, and $7 over the next five years. After that the growth rate will be a constant growth rate of 5% forever. The investor plans to buy the stock, hold it for five years, and sell it. If the investor wants to earn 10% on her or his investment in this stock, what price per share should the investor be willing to pay?
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Fundamentals Of Corporate Finance
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
5th Edition
0135811600, 978-0135811603
