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Q4) Magnetic Corporation expects dividends to grow at a rate of 11.85% for the next two years. After two years, dividends are expected to grow
Q4) Magnetic Corporation expects dividends to grow at a rate of 11.85% for the next two years. After two years, dividends are expected to grow at a constant rate of 3.94% , indefinitely. Magnetics required rate of return is 10.14% and they paid a $1.98 dividend today. Compute the following for Magnetic Corporations common stock:
a) Dividend at end of year 1 : (0.5 points)
b) Dividend at end of year 2 : (0.5 points)
c) Dividend at end of year 3 : (0.5 points)
d) Price of stock at end of year 2 : (1 point)
e) Price of stock today : (1 point)
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