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Simtek currently pays a $4 dividend (D0) per share. Next years dividend is expected to be $4.5 per share. After next year, dividends are expected
Simtek currently pays a $4 dividend (D0) per share. Next years dividend is expected to be $4.5 per share. After next year, dividends are expected to increase at a 9 percent annual rate for 3 years and a 7 percent annual rate thereafter. Use Table II to answer the questions. Do not round intermediate calculations. Round your answers to the nearest cent. What is the current value of a share of Simtek stock to an investor who requires a 13 percent return on his or her investment? $ If the dividend in year 1 is expected to be $4.5 and the growth rate over the following 3 years is expected to be only 8 percent and then 7 percent thereafter, what will the new stock price be? $
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