Compute the value of a stock using the information below:
Dividend per share: $0.50, Today
Dividends are expected to constantly grow at 4% forever
Your required rate of return is 6%
How much would you pay for this stock?
Price
Dividend, a year from now
Rate of return
Growth rate for dividends
Dividend per share: $0.50, Today
Dividends are not expected to grow, ever!
Your required rate of return is 6%
Now, how much would you pay for this stock?
Price
Dividend, a year from now
Rate of return
Growth rate for dividends