Question
Apple. is presently enjoying relatively high growth because of a surge in demand for its new product. Currently, the company pays a $1.46 dividend. Management
-
Apple. is presently enjoying relatively high growth because of a surge in demand for its new product. Currently, the company pays a $1.46 dividend. Management expects earnings and dividends to grow at a rate of 27% for the next 2 years, 20.70% in years 3 and 4, and after which competition will probably reduce the growth rate in earnings and dividends to constant growth rate of 4%. The companys cost of equity is 12%. What is the current price of the common stock?
Apple. is presently enjoying relatively high growth because of a surge in demand for its new product. Currently, the company pays a $1.46 dividend. Management expects earnings and dividends to grow at a rate of 27% for the next 2 years, 20.70% in years 3 and 4, and after which competition will probably reduce the growth rate in earnings and dividends to constant growth rate of 4%. The companys cost of equity is 12%. What is the current price of the common stock?
please show work and show how to do on excel thank you
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Public Finance A Contemporary Application Of Theory To Policy
Authors: David N. Hyman
5th Edition
0030113172, 978-0030113178
