Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Automatic Data Processing Inc. ( ADP ) , an information technology firm, has experienced abnormal growth. The company anticipates that it will grow at an

Automatic Data Processing Inc. (ADP), an information technology
firm, has experienced abnormal growth. The company anticipates
that it will grow at an abnormal rate of 24% for the next three years.
After that, the growth rate will drop to match the industry's constant
growth rate of 6%. If investors require 18% return and the firm's
dividend per share is expected to be $3(DIV1=$3), what should be
ADP's stock price?
Stock price =$
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Market Regulations And Finance

Authors: Ratan Khasnabis, Indrani Chakraborty

2014th Edition

8132217942, 978-8132217947

More Books

Students also viewed these Finance questions

Question

I need the answer for all of this

Answered: 1 week ago