Cambridge Inc. has just paid dividends of $1. The company expects supernormal growth of 25% for the next 5 years, followed by 5% growth thereafter.
Cambridge Inc. has just paid dividends of $1. The company expects supernormal growth of 25% for the next 5 years, followed by 5% growth thereafter. The required rate of return on stocks with similar risk as Cambridge Inc. is 10%. What is the share price of Cambridges stock?
The answer is 47.25
I just dont know how to arrive at the answer
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Authors: Robert D. Edwards, John Magee, W.H.C. Bassetti
11th Edition
1032241829, 978-1032241821
