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The current price for Drummies stock is $36 per share. The dividend is projected to increase at 8% per year for the next 3 years.
The current price for Drummies stock is $36 per share. The dividend is projected to increase at 8% per year for the next 3 years. After three years it is expected to grow at 5% indefinitely. Drummies paid a dividend of $3 yesterday. Drummies return generally responds to market changes twice as much as does the average stock. Treasury bills currently yield 5%. The market is yielding 11%. What should Drummies sell for today? What should it sell for in 3 years
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