Answer Happy

Depressed Panda Slaughterhouses will pay an annual dividend of $1.35 one year from now. Analysts expect this dividend to grow at 14.7% per year until the end of year 23. Thereafter, growth will level off at 5.1% per year in perpetuity. To be explicit on timing, cash flows grow by 14.7% until t=23, the t=24 cash flow will be 5.1% bigger than that the t=23 cash flow, and then cash flows grow by 5.1% annually in perpetuity. The cost of equity capital for Depressed Panda Slaughterhouses is currently 8.5% per annum. According to the dividend-discount model, which of the following is closest to the value today of a share of Depressed Panda Slaughterhouses? O a. $187.00 b. $195.98 O c. $164.78 O d. $176.77 Oe. $173.70