Question
What is the price of a stock that just paid a $5 dividend yesterday and it dividends are expected to grow at a rate of
What is the price of a stock that just paid a $5 dividend yesterday and it dividends are expected to grow at a rate of 3% per annum forever? Assume that the cost of capital is 10%
2)Because of your supreme performance in this class, I decided to buy you lunch every single day for the rest of your life. Suppose that a lunch costs $10 a day and its price will never change. Also, the comparable "quoted" interest rate is 6% per annum, compounded daily. What is value of my free offer today, assuming you will live for 80 more years? What should it be worth to you to be able to bequeath or sell it upon your departure?
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Step: 1
1 Stock Price with Constant Growth Dividend Discount Model DDM We can use the constant growth dividend discount model DDM to determine the fair price ...
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Contemporary Financial Management
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
10th Edition
978-0324289114, 0324289111
