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Varigrowth Inc. just paid a dividend of $1.38 (i.e., D0 =$1.38 ). Such dividend is expected to grow by 40% per year for the next
Varigrowth Inc. just paid a dividend of $1.38 (i.e., D0 =$1.38 ). Such dividend is expected to grow by 40% per year for the next 3 years, after which it is expected to grow at a long-run rate of 2%. Assuming investors require a 13% return on the stock, a) What is the price at t=3 ? $ (to the nearest cent) b) What is its price today? $ (to the nearest cent) c) What is your total rate of return (\% to two decimals) if in one year the price is $35.74 and the dividend is $1.81? What is your dividend yield
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