Question
Bayou Okra Farms just paid a dividend of $2.65 on its stock. The growth rate in dividends is expected to be a constant 4.5 percent
Bayou Okra Farms just paid a dividend of $2.65 on its stock. The growth rate in dividends is expected to be a constant 4.5 percent per year indefinitely. Investors require a return of 15 percent for the first three years, a return of 13 percent for the next three years, and a return of 11 percent thereafter. What is the current share price?
Please explain and solve the problems with explanations for each step, there are other experts' answers to this question on Chegg but none of them have the same answer so I am very confused.
If you could also go into further detail on how to apply the required return to the share price, that would be very helpful!
Thanks
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