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Damogran, Inc. stock currently sells for $34 per share. The firm just paid a dividend of $2.00 and the dividend is expected to grow at
Damogran, Inc. stock currently sells for $34 per share. The firm just paid a dividend of $2.00 and the dividend is expected to grow at 12% for the next three years. Starting in year four the dividend growth rate will drop to 5% and is expected to grow at 5% per year for perpetuity. You believe that the appropriate rate of return is 12%. Would you buy this stock, if no other investments provided an equally attractive rate of return? Either show work or calculator inputs and circle your final answer.
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