Question
The dividend will be $1.00 next year (D1), $1.06 year 2 (D2), and will grow 4% in year 4 and every year thereafter (constant growth).
The dividend will be $1.00 next year (D1), $1.06 year 2 (D2), and will grow 4% in year 4 and every year thereafter (constant growth).
1) The cost of equity is 10%.Calculate the stock price today?
2) What will be the stock price in year 5?
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Modern Portfolio Theory and Investment Analysis
Authors: Edwin Elton, Martin Gruber, Stephen Brown, William Goetzmann
9th edition
9781118805800, 1118469941, 1118805801, 978-1118469941
