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Smith Inc. just paid a dividend of $2.00. Investors expect dividends to grow at 3% per year indefinitely and require a return of 12.5%. What
Smith Inc. just paid a dividend of $2.00. Investors expect dividends to grow at 3% per year indefinitely and require a return of 12.5%. What is the current stock price? (I answered this portion which came out to be $21.68)
Now investors expect dividends to grow 20% in Year 1, 15% in Year 2, 10% in Year 3, and then at a constant rate of 3%. What is the current stock price? (Please answer this portion of the question)
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