Question
Ewert Enterprises' stock currently sells for $30.50 per share. The stock's dividend is projected to increase at a constant rate of 6.20% per year. The
Ewert Enterprises' stock currently sells for $30.50 per share. The stock's dividend is projected to increase at a constant rate of 6.20% per year. The required rate of return on the stock, rs, is 10.00%. What is Ewert's expected price 3 years from today?
Slightly advanced). Referring back to problem #8, what percentage of the current price is represented by the dividends forecast to be paid after year 4? That is, include the dividends paid in year 5 and beyond to calculate an answer to this question.
Is the current price more reflective of dividends paid in the short- or long-term?
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