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In early 2018 Disk Company (DO) had a share price of $45.49, and had paid a dividend of $1.52 for the prior year. Suppose you
In early 2018 Disk Company (DO) had a share price of $45.49, and had paid a dividend of $1.52 for the prior year. Suppose you expect Disk Company to raise this dividend by approximately 6.1% per year in perpetuity.
- If Disk's equity cost of capital is 8.1%, what share price would you expect based on your estimate of the dividend growth rate. Disks price per share should be? (Round answer 3 decimal places)
- Given Disk's share price, what would you conclude about your assessment of Coca-Cola's future dividend growth. Given Disk's share price, its dividend growth rate shoud be? (Round answer to 3 decimal places)
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