Question
The dividend that was just paid on ABC stock was $3.25. The company is expected to grow at 6% in the next four years
The dividend that was just paid on ABC stock was $3.25. The company is expected to grow at 6% in the next four years and then have a constant growth of 3% after that forever. The cost of common equity 5%. What should be the price of the stock in four years, P(4), when the the company's growth rate becomes a constant 3%? Round to the nearest whole dollar.
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Corporate Finance A Focused Approach
Authors: Michael C. Ehrhardt, Eugene F. Brigham
6th edition
1305637100, 978-1305637108
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