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Delta Inc. has just paid a dividend of $2.50 per share. Analysts ofthe company's shares estimate a supernormal growth rate of 30% for the company
Delta Inc. has just paid a dividend of $2.50 per share. Analysts ofthe company's shares estimate a supernormal growth rate of 30% for the company for the next three years. Afterwards, the company is expected grow at a rate of 20% for another three years, before settling down to a stable growth rate of 8% forever. What is Delta's share price in three years time (after the third year of supernormal growth), assuming a required return of 15%?
a) $84.74
b) $87.24
c) $96.28
d) $114.23
e) $128.88
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