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Stock valuation: The task is to find the value of the stock given the following forecasts about the dividends: For the next four years, the
Stock valuation: The task is to find the value of the stock given the following forecasts about the dividends: For the next four years, the forecasted dividends are 4EUR, 5EUR, 6EUR and 7EUR respectively. After for years, the dividends are expected to grow by 4% per year forever. The required return, given the level of risk, from an investment into stock is 12%. Find the value of stock. If the current stock price is 72 euros, would you recommend buying this stock?
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