A company announced that it will start to pay a dividend next year and forecasted dividends for the next several years a
Posted: Tue Jan 18, 2022 12:59 pm
A company announced that it will start to pay a dividend next
year and forecasted dividends for the next several years as
follows:
Year 1: $2.00
Year 2: $4.00
Year 3: $7.00
Year 4: $10.00
Year 5: $12.00
After which it expects dividends to grow by 3%. If the
required rate of return is 12%, what is the expected value of the
stock in year 5 and what is the value of the stock today?
year and forecasted dividends for the next several years as
follows:
Year 1: $2.00
Year 2: $4.00
Year 3: $7.00
Year 4: $10.00
Year 5: $12.00
After which it expects dividends to grow by 3%. If the
required rate of return is 12%, what is the expected value of the
stock in year 5 and what is the value of the stock today?