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Company A has pulled off a recovery. Four years ago it was near bankruptcy. Today it announced a $1 per share dividend to be paid
Company A has pulled off a recovery. Four years ago it was near bankruptcy. Today it announced a $1 per share dividend to be paid a year from now, the first dividend since the crisis. Analysts expect dividends to increase $1 a year for another 2 years. After the third year, ( in which dividends are $3 per share) dividend growth is expected to settle down to a more moderate long-term growth rate of 10%. If the firm's investorsexpect to earn a return of 15% on this stock, what must be its price? (Round to two decimals).
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