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The current dividends per share per quarter of common stock of XYZ Ltd. are $0.8 and XYZ Ltd. pays dividends on a quarterly basis. Suppose
The current dividends per share per quarter of common stock of XYZ Ltd. are $0.8 and XYZ Ltd. pays dividends on a quarterly basis. Suppose quarterly growth rate of the dividends stream of XYZ Ltd. is 4% in the next two quarters, and thereafter this growth rate will decline to 1.0% and will stay at 1.0% for indefinite period. Suppose the required expected rate of return on common stock is 3% per quarter. Find: (i) The current price per share of the stock (ii) The expected price per share at the end of the fourth quarter
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