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The Rapid Growth Company is expected to pay a dividend of $2.00 at the end of this year. Thereafter, the dividends are expected to grow
The Rapid Growth Company is expected to pay a dividend of $2.00 at the end of this year. Thereafter, the dividends are expected to grow at the rate of 25% per year for 1 years, and then drop to 18% for 1 year, before settling at the industry average growth rate of 10% indefinitely. If you require a return of 16% to invest in a stock of this risk level, how much would you be justified in paying for this stock
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