Question
Nonconstant Dividend Growth Valuation A company currently pays a dividend of $1.8per share (D 0 = $1.8). It is estimated that the company's dividend will
Nonconstant Dividend Growth Valuation
A company currently pays a dividend of $1.8per share (D0 = $1.8). It is estimated that the company's dividend will grow at a rate of 17% per year for the next 2 years, and then at a constant rate of 7% thereafter. The company's stock has a beta of 1.7, the risk-free rate is 8.5%, and the market risk premium is 5%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent.
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Personal Finance
Authors: Jeff Madura, Hardeep Singh Gill
3rd Canadian Edition
978-0133035575, 133035573, 978-0133970524, 133970523, 978-0134040042
