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The stock of Zircon corp.is expected to distribute a dividend of $5 per year next year. We expect a market (index) return of 24% and
The stock of Zircon corp.is expected to distribute a dividend of $5 per year next year. We expect a market (index) return of 24% and the beta of Zircon corp.is 0.8. The riskless rate of return is 4%. Analysts expect a 5% growth rate in dividends of that stock in the coming 2 years and then they expect that the dividend growth rate will accelarate to 12% starting in year 3. Given this; find the fundamental price of Zircon stock.
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