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Calculate the stock price (of the firm whose current dividend is $1 and is expected to grow at 10% a year for three years, it
Calculate the stock price (of the firm whose current dividend is $1 and is expected to grow at 10% a year for three years, it then grows to 8% for next three years. After six years the new growth rate is expected to be a constant 6% a year and discount rate is 10%. The market return is 6% and return on risk free bills is 2%. This firm has covariance (with the market) of 0.032 and variance of 0.015 or 1.5%. (5)
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