1 abc enterprises stock is expected to pay a dividend of 12, Ask an Expert

Finance

1. ABC Enterprises' stock is expected to pay a dividend of $1.2 per share. The dividend is projected to increase at a constant rate of 4% per year. The required rate of return on the stock is 14.4%. What is the stock's expected price 3 years from today (i.e. solve for P3)?

2. ABC's last dividend was $2.1. The dividend growth rate is expected to be constant at 23% for 3 years, after which dividends are expected to grow at a rate of 6% forever. If the firm's required return (rs) is 17%, what is its current stock price (i.e. solve for Po)?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92800106

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