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The company ABC Inc. just paid 2.25$ in dividend per share. The analysts predict that the dividend will grow by 20% for the next 2
The company ABC Inc. just paid 2.25$ in dividend per share. The analysts predict that the dividend will grow by 20% for the next 2 years. They also anticipate that ABC will not pay any dividend for 3rd and 4th years. The dividend will be 4$ at 5th year and it will grow at 8% afterwards. a) If the required return on this company is 16%, calculate the price of these shares today. b) Calculate the price in 2 and 3 years
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