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You've collected the following information from your favorite financial website According to your research, the growth rate in dividends for SIR for the next five
You've collected the following information from your favorite financial website According to your research, the growth rate in dividends for SIR for the next five years is expected to be 20 percent. Suppose SIR meets this growth rate in dividends for the next five years and then the dividend growth rate falls to 5.25 percent indefinitely. Assume investors require a return of 14 percent on SIR stock. According to the dividend growth model, what should the stock price be today? Current stock price $ Based on these assumptions, is the stock currently overvalued, undervalued, or correctly valued
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