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Biogenetics, Inc. plans to retain and reinvest all of their earnings for the next 30 years. Investors believe that at the end of year 31
Biogenetics, Inc. plans to retain and reinvest all of their earnings for the next 30 years. Investors believe that at the end of year 31 the firm will pay a dividend of $12.00 per share. The dividend will increase at a 6% rate annually thereafter. Given a required return of 15%, how much should be price of the stock on year (P30)? What would be the price of the stock on year zero (P0)?
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