Question
Johnson Manufacturing just paid its shareholders a dividend of $4.75 (ie, DIV0=$4.75). Johnson's CFO expects dividends will grow at a predictable and constant annual rate
Johnson Manufacturing just paid its shareholders a dividend of $4.75 (ie, DIV0=$4.75). Johnson's CFO expects dividends will grow at a predictable and constant annual rate of 11% per year (g=.11%) forever. The CFO also uses a required rate of return of 14% (or r=.14) to satisfy its common shareholders. What should be the current market price of Johnson's common stock today?
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Financial Reporting And Statement Analysis A Strategic Approach
Authors: Clyde P. Stickney, Paul Brown, James M. Wahlen
5th Edition
032418638X, 978-0324186383
