Question
Katie's Bakery currently pays a $5.00 common stock dividend. Dividend have been recently growing at 12% annual rate and are expected to continue growing at
Katie's Bakery currently pays a $5.00 common stock dividend. Dividend have been recently growing at 12% annual rate and are expected to continue growing at this rate in the next four years. Thereafter the growth rate is expected to be 6% for the foreseeable future. What is the current value of Katie's Bakery common stock to an investor requiring a 15% rate of return?
| Dividend | $0.00 | ||||||
| Return on Investment | 0.00% | ||||||
| Annual | |||||||
| Growth | Selling | Current | Sum of | ||||
| Year | Rate | Dividend | Price | Value | Dividends | ||
| 0 | 0.00% | $0.00 | #DIV/0! | ||||
| 1 | 0.00% | $0.00 | #DIV/0! | #DIV/0! | $0.00 | ||
| 2 | 0.00% | $0.00 | #DIV/0! | #DIV/0! | $0.00 | ||
| 3 | 0.00% | $0.00 | #DIV/0! | #DIV/0! | $0.00 | ||
| 4 | 0.00% | $0.00 | #DIV/0! | #DIV/0! | $0.00 | ||
| 5 | 0.00% | $0.00 | #DIV/0! | #DIV/0! | $0.00 | ||
| 6 | 0.00% | $0.00 | #DIV/0! | #DIV/0! | $0.00 | ||
| 7 | 0.00% | $0.00 | #DIV/0! | #DIV/0! | $0.00 | ||
| 8 | 0.00% | $0.00 | #DIV/0! | #DIV/0! | $0.00 | ||
| 9 | 0.00% | $0.00 | #DIV/0! | #DIV/0! | $0.00 | ||
| 10 | 0.00% | $0.00 | #DIV/0! | #DIV/0! | $0.00 | ||
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Essentials Of Investments
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
7th Edition
0073368717, 978-0073368719
