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Varigrowth Inc. just paid a dividend of $2.98 (i.e., D0 = $2.98). Such dividend is expected to grow by 45% per year for the next
Varigrowth Inc. just paid a dividend of $2.98 (i.e., D0 = $2.98). Such dividend is expected to grow by 45% per year for the next 3 years, after which it is expected to grow at a long-run rate of 3%. 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 $70.72 and the dividend is $4.55? What is your dividend yield?% What is your capital gain (loss) yield? %
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