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Q1 ) You are trying to value the stock of Cowbell Inc. You know that the firm only uses dividends to return cash to its
Q1) You are trying to value the stock of Cowbell Inc. You know that the firm only uses dividends to return cash to its investors and you have forecasted the dividends for the 4 years (see table below). You believe that dividends will grow at a constant rate of 2% each year after year 4. The cost of equity is 10%. Given this information estimate the share price for Cowbell Inc. Round the answer to two decimals (do not enter the $-symbol in the answer).
Dividend Forecasts Year 1 2 3 4
Dividend per Share (in $) 1.6 1.6 1.5 2.2
Question 1 5 points Save Answer You are trying to value the stock of Cowbell Inc. You know that the firm only uses dividends to return cash to its investors and you have forecasted the dividends for the 4 years (see table below). You believe that dividends will grow at a constant rate of 2% each year after year 4. The cost of equity is 10%. Given this information estimate the share price for Cowbell Inc. Round your answer to two decimals (do not enter the $-symbol in your answer). Dividend Forecasts Year 1 2 3 4 Dividend per Share (in $) 1.6 1.6 1.5 2.2Step by Step Solution
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