Question
Nonconstant Growth Valuation A company currently pays a dividend of $1.6 per share (D 0 = $1.6). It is estimated that the company's dividend will
Nonconstant Growth Valuation
A company currently pays a dividend of $1.6 per share (D0 = $1.6). It is estimated that the company's dividend will grow at a rate of 20% per year for the next 2 years, and then at a constant rate of 8% thereafter. The company's stock has a beta of 1.2, the risk-free rate is 8%, and the market risk premium is 4.5%. 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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College Accounting A Contemporary Approach
Authors: David Haddock, John Price, Michael Farina
3rd edition
77639731, 978-0077639730
