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Constant-growth DCF model* Here are forecasts for next year for two stocks: Stock A Stock B ROI 15 10 EPS $2 $1.5 Div. PS $1
Constant-growth DCF model*
Here are forecasts for next year for two stocks:
Stock A | Stock B | |
ROI | 15 | 10 |
EPS | $2 | $1.5 |
Div. PS | $1 | $1 |
a. What are the dividend payout ratios for each firm? b. What are the expected dividend growth rates for each stock?
c. If investors require a return of 15% on each stock, what are their values?
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