Company A has grown at a constant rate, which equals 4%. The growth rate is expected...
Company A has grown at a constant rate, which equals 4%. The growth rate is expected to continue long in the future. The company has just paid a dividend equal to $3/share. If investors require a 10% rate of return, what is the value of the stock?
Homework Answers
Current price=D1/(Required return-Growth rate)
=(3*1.04)/(0.1-0.04)
which is equal to
=$52
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