Question
Youve collected the following information from your favorite financial website. 52-Week Price Stock (Dividend) Dividend Yield % PE Ratio Close Price Net Change Hi Lo
Youve collected the following information from your favorite financial website. 52-Week Price Stock (Dividend) Dividend Yield % PE Ratio Close Price Net Change Hi Lo 77.40 10.43 Acevedo .36 2.6 6 13.90 .24 55.81 33.42 Georgette, Incorporated 1.54 3.8 10 40.43 .01 131.07 70.20 YBM 2.70 3.0 10 89.11 3.07 50.24 13.95 Manta Energy .80 5.2 6 15.43 .26 35.00 20.74 Winter Sports .32 1.5 28 ?? .18 According to analysts, the growth rate in dividends for YBM for the next five years is expected to be 20.5 percent. Suppose YBM meets this growth rate in dividends for the next five years and then the dividend growth rate falls to 5.5 percent, indefinitely. Assume investors require a return of 15 percent on YBM stock. According to the dividend growth model, what should the stock price be today?
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