Question
QUESTION FOUR Share valuation Anderson Concrete Pty Limited (ACP) has introduced another product. As a result, dividends are expected to grow at 18% for the
QUESTION FOUR Share valuation
Anderson Concrete Pty Limited (ACP) has introduced another product. As a result, dividends are expected to grow at 18% for the next 3 years. After that the growth rate will fall to 9% indefinitely. ACP has no long-term debt and its expected rate of return is 11.35%. The company just paid a dividend of $0.55 per share.
Required:
- Calculate the estimated value of ACP stock?
- What is the value of the stock at end of year 4?
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Investment Science
Authors: David G. Luenberger
1st International Edition
0195391063, 9780195391060
