Tattletale News Corp. has been growing at a rate of 20% per year, and you expect this

Question:

Tattletale News Corp. has been growing at a rate of 20% per year, and you expect this growth

rate in earnings and dividends to continue for another 3 years.

a. If the last dividend paid was $2, what will the next dividend be?

b. If the discount rate is 15% and the steady growth rate after 3 years is 4%, what should the stock price be today?

Growth rate. .......20.00%

Last dividend paid... $2.00

Discount rate.......... 15.00%

Steady growth rate (b). 4.00%

Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...