Question
At the end of the year 2020 Brown Bear Corporation paid dividends $2.52 per share. The company projects the following annual growth rates in dividends:
At the end of the year 2020 Brown Bear Corporation paid dividends $2.52 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 4%
From year 2027 onward growth in dividends is expected to remain constant at 2% per year. The required rate of return for this stock is 11.02%.
Calculate the economic value of the stock now (end of the Year 2020)
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Financial Analysis And Modeling Using Excel And VBA
Authors: Chandan Sengupta
2nd Edition
047027560X, 978-0470275603
