The ABC Company just paid a dividend of $1 per share. The dividend is expected to grow at a rate of 5% and 19% for the n
Posted: Mon May 02, 2022 8:51 am
The ABC Company just paid a dividend of $1 per share. The
dividend is expected to grow at a rate of 5% and 19% for the next
two years and then to stabilize to 7% per year forever. The
company's beta is 0.7, and the riskfree rate is 2%. If the
consensus estimate for the market excess return is 13%, what is
your estimate of the intrinsic value of a share of the stock?
dividend is expected to grow at a rate of 5% and 19% for the next
two years and then to stabilize to 7% per year forever. The
company's beta is 0.7, and the riskfree rate is 2%. If the
consensus estimate for the market excess return is 13%, what is
your estimate of the intrinsic value of a share of the stock?