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Assume that the average firm in your company's industry is expected to grow at a constant rate of 5%, and its dividend yield is 4%.
Assume that the average firm in your company's industry is expected to grow at a constant rate of 5%, and its dividend yield is 4%. Your company is about as risky as the average firm in the industry, but it has just developed a line of innovative new products, which leads you to expect that its earnings and dividends will grow at a rate of 40% (D1 = D0(1.40)) this year and 25% the following year after which growth should match the 5% industry average rate. The last dividend paid (D0) was $2. What is the stock's value per share? $ 42.60 $ 82.85 $ 91.88 $101.15 $110.37
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