Question

Yow diwidend cDIVo which bns.paid yeste rda was $o dlenk isepected.to groue, irnnitely at a 6 roup, inf intely at a 6 percen rate Now assume that Disney is expected to experience supernormal dividend growth of 30 percent for the next 3 years, then to fall to a long-run constant growth rate of 10 percent. What would the stock's value be under these conditions? e. f. Suppose Disney was expected achieve a constant growth rate of 11 percent in the fourth year and thereafter. What would be the stock's value now? to experience zero growth during the next 3 years and then to g. Finally assume that Disney's earnings and dividends are expected to decline by a constant 6 percent per year. Would you or anyone else be willing to buy such stock? At what price should it sell