Question
Common stock value: Constant growth Seagate Technology is a global leader in data storage solutions and a high-yield dividend payer. From 2015 through 2019 Seagate
Common stock value: Constant growth
Seagate Technology is a global leader in data storage solutions and a high-yield dividend payer. From 2015 through 2019 Seagate paid the following per-share dividends:
Year | Dividend per share |
2019 | $2.56 |
2018 | $2.23 |
2017 | 1.83 |
2016 | 1.17 |
2015 | 1.54 |
Assume that the historical annual growth rate of Seagate dividends is an accurate estimate of the future constant annual dividend growth rate. Use a 18% required rate of return to find the value of Seagate's stock immediately after it paid its 2019 dividend of $2.56.
The value of Seagate's stock is?
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