Question
Company Zs earnings and dividends per share are expected to grow indefinitely by 5% a year. If next years dividend is $10 and the market
Company Zs earnings and dividends per share are expected to grow indefinitely by 5% a year. If next years dividend is $10 and the market capitalization rate is 8%, what is the current stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Company Z-primes earnings and dividends per share are expected to grow by 5% 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 $10, the market capitalization rate is 8% and next years EPS is $15. What is Z-primes stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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