fin 305

chapter 8 question 9

A fast-growing firm recently paid a dividend of $0.15 per share. The dividend is expected to increase at a 10 percent rate for the next three years. Afterwards, a more stable 5 percent growth rate can be assumed.

If a 6 percent discount rate is appropriate for this stock, what is its value today? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Stock value

$