Question
You expect GDL to pay a dividend of $3 in one year, $4 in two years and $5 in 3 years. After that, you think
You expect GDL to pay a dividend of $3 in one year, $4 in two years and $5 in 3 years. After that, you think dividends will grow at a constant rate of 3%. You require a return of 13% to invest in GDL.
How much would you pay for a share of the company today?
Keep at least 4 decimals in all of your calculations.
Round your final answer to 2 decimal places, for example 39.12.
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Financial Reporting and Analysis
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
7th edition
1259722651, 978-1259722653
