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Normal tea companies grow at a constant rate of 5%.However, Super Tea company has tested a brand new tea that will lead to signfiicant growth.
Normal tea companies grow at a constant rate of 5%.However, Super Tea company has tested a brand new tea that will lead to signfiicant growth. The current dividend is $3.0, but over the next two years it will grow by 25%.By year 3, expectations are that Super Tea company will revert to the mean with 4% growth. Super T current beta is 2, with a risk-free rate of 2%, and the market risk premium at 5%. What is Super Tea company expected dividend stream over the next three years?
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