Question
Due to an extensive investment in research and development, Banana Inc., recently developed a new wireless communication system that should greatly increase the stock's dividend.
Due to an extensive investment in research and development, Banana Inc., recently developed a new wireless communication system that should greatly increase the stock's dividend. One analyst believes the current annual dividend of $1 will increase by 20% for each of the next 3 years and then 6% for the foreseeable future. What is the intrinsic value per share of the company's stock assuming an investor's required rate of return of 8%?
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Corporate Finance Core Principles and Applications
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
5th edition
1259289907, 978-1259289903
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