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What is the value of a stock which pays a $4 dividend/year (first dividend in 9...

What is the value of a stock which pays a $4 dividend/year (first dividend in 9 years), growing at 9% forever, if the discount rate is 10%?

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Answer #1

9% А. B с 1 Dividend Year 9 $ 4 2 Growth rate,g 3 Discount Rate 10% 4 5 As per Constant growth Model 6 7 Value of stock at ye4 A B 1 Dividend Year 9 2 Growth rate,g 0.09 3 Discount Rate 0.1 4 5 As per Constant growth Model 6 7 Value of stock at year

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