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Q6. The directors of Gamma Inc. expect to pay a dividend of $1.50 (annual) a year from today. It is estimated that during the next
Q6. The directors of Gamma Inc. expect to pay a dividend of $1.50 (annual) a year from today. It is estimated that during the next three years (.e. years 2 through 4), the dividend will grow at an annual rate of 12 percent (.e. g1 = 12 percent). After that, the growth rate (82) will be equal to 8 percent per year and continue at that rate indefinitely. Calculate the present value of the Gamma's stock if the required rate of return is 15 percent
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