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please answer both parts right to this problem, thank you Intro A stock just paid an annual dividend of $2.1. The dividend is expected to
please answer both parts right to this problem, thank you
Intro A stock just paid an annual dividend of $2.1. The dividend is expected to grow by 9% per year for the next 3 years. The growth rate of dividends will then fall steadily (linearly) from 9% after 3 years to 6% in year 6. The required rate of return is 12%. Part 1 - Attempt 1/10 for 10 pts. What is the value of the stock if the dividend growth rate will stay 0.06 (6%) forever after 6 years? 1+ decimals Submit Part 2 1 Attempt 1/10 for 10 pts. In 6 years, the P/E ratio is expected to be 13 and the payout ratio to be 80%. What is the value of the stock when using the P/E ratio? 1+ decimals Submit Step by Step Solution
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