Question
MacLean, Inc. currently pays no dividends. Today, the firm announced that it will pay its first dividend of $1 per share in four years, then
MacLean, Inc. currently pays no dividends. Today, the firm announced that it will pay its first dividend of $1 per share in four years, then $1.50 in each of the following three years, and the subsequent dividends are expected to grow at a constant rate of 5 percent per year.
What is the stock price today if the risk free rate is 4 percent and the risk premium associated with this stock is 6 percent?
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Fundamentals of Advanced Accounting
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
5th edition
978-0077924379, 77924371, 978-0078025396, 78025397, 978-0077425654, 77425650, 978-0077667061
