Question
At the end of the year 2020 Brown Bear Corporation paid dividends $4.34 per share. The company projects the following annual growth rates in dividends:
At the end of the year 2020 Brown Bear Corporation paid dividends $4.34 per share. The company projects the following annual growth rates in dividends:
Year Growth Rate
2021 14%
2022 14%
2023 14%
2024 11%
2025 7%
2026 5%
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 9.58%.
Calculate the economic value of the stock now (end of the Year 2020).
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Finance For IT Decision Makers
Authors: Michael Blackstaff
3rd Edition
1780171226, 978-1780171227
