Question
Company Z-primes earnings and dividends per share are expected to grow by 2% a year. Its growth will stop after year 4. In year 5
Company Z-primes earnings and dividends per share are expected to grow by 2% a year. Its growth will stop after year 4. In year 5 and afterward, it will pay out all earnings as dividends. Assume next years dividend is $6, the market capitalization rate is 12% and next years EPS is $11. What is Z-primes stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
12th Edition
978-0030243998, 30243998, 324422695, 978-0324422696
