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Consider the following three stocks: Stock A is expected to provide a dividend of $11.20 a share forever. Stock B is expected to pay a
Consider the following three stocks:
- Stock A is expected to provide a dividend of $11.20 a share forever.
- Stock B is expected to pay a dividend of $6.20 next year. Thereafter, dividend growth is expected to be 6.00% a year forever.
- Stock C is expected to pay a dividend of $4.80 next year. Thereafter, dividend growth is expected to be 22.00% a year for five years (i.e., years 2 through 6) and zero thereafter.
a-1. If the market capitalization rate for each stock is 12.00%, what is the stock price for each of the stocks? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Thank you!
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