Question
AVZ is a start-up company who is using all its cash to growth so it does not plan to pay dividends for the next 5
AVZ is a start-up company who is using all its cash to growth so it does not plan to pay dividends for the next 5 years. The company then plans to start paying annual cash dividends starting in year 6 of $ 4.00 for 10 years. Thereafter, the company will assume a constant growth dividend policy and the estimated growth rate in dividends forever after that point is 3%. The price of the stock is set to yield a return of 10%. What is the price of this stock today?
The price today is $__________
(Do not use $ sign. Use commas to separate thousands. In this answer, please use TWO decimals in your response and round to the nearest cents
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