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Please don't use excel, i need to learn the steps without excel. 4. (Ch 6) Starbucks paid no dividend for the first 17 years since
Please don't use excel, i need to learn the steps without excel. 4. (Ch 6) Starbucks paid no dividend for the first 17 years since its IPO back in 1992 (take this as time 0, so 1993 is time 1, 1994 is time 2 and so on). The first dividend payment of $0.25 occurred in 2010. After that, the dividend maintained a 10% growth rate for ten years. Then Starbucks decides to maintain a growth rate of 5% forever. Question is, what is a fair IPO price for Starbucks back in 1992 if the required rate of return back then was 7%
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