Question
Kingsway Electronics Inc. is expecting a period of intense growth and has decided to increase the annual dividend by 25% a year for the next
Kingsway Electronics Inc. is expecting a period of intense growth and has decided to increase the annual dividend by 25% a year for the next three years. After that they will maintain a constant growth rate of 6% per year. Last year, the company paid $2.35 as the annual dividend per share. What is the current price of this stock if the required rate of return is 10%?
Step by Step Solution
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Step: 1
To determine the current price of the stock we can use the dividend discount model DDM which calcula...
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Intermediate Accounting
Authors: Beechy Thomas, Conrod Joan, Farrell Elizabeth, McLeod Dick I
Volume 1, 6th Edition
1259103250, 978-1259103254, 978-0071339476
