Question
At the end of the year 2020 Brown Bear Corporation paid dividends $4.98 per share. The company projects the following annual growth rates in dividends:
At the end of the year 2020 Brown Bear Corporation paid dividends $4.98 per share. The company projects the following annual growth rates in dividends:
Year Growth Rate
2021 12%
2022 12%
2023 12%
2024 10%
2025 8%
2026 6%
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 12.54%.
Calculate the economic value of the stock now (end of the Year 2020).
Your Answer:
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International Finance
Authors: Keith Pilbeam
5th Edition
1350347094, 978-1350347090
