Question
The earning per share for ABC Company is expected to be $13 in 2019. The company pays dividend on the last day of each
The earning per share for ABC Company is expected to be $13 in 2019. The company pays dividend on the last day of each year (31/12). The company announced today (1/1/2019) that in 2019 they will pay dividend of $6 per share. In 2020 they will pay $7 and in 2021 they will pay $8. After that every year the company will pay 50% of the earning per share forever. If the required rate of return for this company is 10% and the return on earning is 15% what is the stock's price today? What is the PVGO of this company?
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