Question
At the end of the year 2022 Great Lakes Corporation paid dividends $2.45 per share. The company projects the following annual growth rates in dividends:
At the end of the year 2022 Great Lakes Corporation paid dividends $2.45 per share. The company projects the following annual growth rates in dividends:
Year Growth Rate
2023 13%
2024 11%
From year 2025 onward growth in dividends is expected to remain constant at 2% per year. The required rate of return for this stock is 9.02%.
Calculate the economic value of the stock now (end of the Year 2022).
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
12th Edition
978-0030243998, 30243998, 324422695, 978-0324422696
