Question
At the end of the year 2020 Brown Bear Corporation paid dividends $2.09 per share. The company projects the following annual growth rates in dividends:
At the end of the year 2020 Brown Bear Corporation paid dividends $2.09 per share. The company projects the following annual growth rates in dividends:
Year Growth Rate
2021. 12%
2022. 12%
2023 12%
2024 9%
2025 6%
2026 6%
From year 2027 onward growth in dividends is expected to remain constant at 3% per year. The required rate of return for this stock is 10.94%. Calculate the economic value of the stock now (end of the Year 2020).
Step by Step Solution
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To calculate the economic value of the stock now end of the Year 2020 we can use the dividend discou...
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Fundamentals Of Corporate Finance
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
5th Edition
0135811600, 978-0135811603
