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You graduated from UCLA and founded your own company. It's now 10 years lat- er and your company is mature and its shares are traded
You graduated from UCLA and founded your own company. It's now 10 years lat- er and your company is mature and its shares are traded on the NYSE. Your company just paid a $3.00 dividend this past year. The company expects to grow at 20% for the next two years (effecting dividends at the end of year 1 and 2), then the company expects to grow at 10% for three additional years (effecting div- idends at the end of year 3, 4, and 5) after which your company expects to grow at a constant rate of 5% per year in perpetuity. (Hint: To be clear, the first dividend payment, which occurs at t=1 is $3.00*(1.20) = $3.60) If the appropriate discount rate (r) for calculating the value of your company's stock is 12%, then what is one share of your company's stock worth
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