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Whizz corp has paid a dividend of $3 per share. You expect that the dividend will be $3 next year (t=1), increase 20% the next
Whizz corp has paid a dividend of $3 per share. You expect that the dividend will be $3 next year (t=1), increase 20% the next year (t=2) and then increase 10% the following year (t=3), and finally grow at a rate of 5% indefinetly (after t=3). Company Assets are $150 million and it's debt is $75 million. The asset beta is 2. Risk free rate is 5%, market risk premium is 5%. Company Tax rate is 0. What is the value of the stock today?
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