Question
We have the following information for the Valverde company. The stock pays a $1 dividend, and it will grow by 12% the first year, 9%
We have the following information for the Valverde company. The stock pays a $1 dividend, and it will grow by 12% the first year, 9% the second year and 3% forever after that. The unlevered bheta is 1, D/E is 75/25 and the tax rate is .3. Additionally, we know the treasury bond rate is .04 and the ROR of the S&P has been 10%.
Derive the stock price of Valverde.
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Personal Finance
Authors: Thomas Garman, Raymond Forgue
12th edition
9781305176409, 1133595839, 1305176405, 978-1133595830
