Question
Ten years ago, Pac Pac Toys began manufacturing and selling retro arcade games for sports bars. Dividends are currently $2.85 per share, having grown at
Ten years ago, Pac Pac Toys began manufacturing and selling retro arcade games for sports bars. Dividends are currently $2.85 per share, having grown at a 10.00 percent compound annual rate over the past 5 years. That growth rate is expected to be maintained for the next 2 years, after which dividends are expected to grow at half that rate for 3 years. Beyond that time, Pac Pac Toyss dividends are expected to grow at 5.00 percent per year. What is the current value of a share of Pac Pac Toys common stock if your required return is 19.00 percent?
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