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Aspen Australia Pty Ltd is a fast-growing drug company. The company forecasts that in the next 3 years, its growth rates will be 30 percent,
Aspen Australia Pty Ltd is a fast-growing drug company. The company forecasts that in the next 3 years, its growth rates will be 30 percent, 28 percent, and 24 percent, respectively. The company has just paid a cash dividend of $1.67. After 3 years, the company expects a more stable growth rate of 8 percent per year. Your required rate of return is 14 percent. Required: 1. Calculate the dividends for the next 3 years, and find its present value. 2. Calculate the price of the share at the end of year 3 when the company settles to a constant growth rate. 3. What is the current price of the share
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