Question
Finance3000 is a young start-up company. It will not pay any dividends on its stock over the next nine years because it plans to use
"Finance3000" is a young start-up company. It will not pay any dividends on its stock over the next nine years because it plans to use retained earnings on expanding its business. "Finance3000" will pay a $10 per share dividend 10 years from today. After that the company will increase the dividend by 4 percent per year, in perpetuity. The required return on this stock is 12.5 percent. Calculate the value of one share of "Finance3000"'s stock. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current Share Price_____? |
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