The WedLink Corporation just paid a dividend of $1.25 to its common shareholders, and announced that it

Question:

The WedLink Corporation just paid a dividend of $1.25 to its common shareholders, and announced that it expects the dividends to grow by 25% per year for the next 3 years, then drop to a growth rate of 16% for an additional 2 years, after which it expects the dividends to converge to the industry median growth rate of 8% per year. If investors are expecting 12% per year on WedLink’s stock, calculate the current stock price.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... 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...