Acompany currently pays a dividend of 125 per share d0 , Ask an Expert

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A company currently pays a dividend of $1.25 per share (D0 = $1.25). It is estimated that the company's dividend will grow at a rate of 24% per year for the next 2 years, and then at a constant rate of 6% thereafter. The company's stock has a beta of 1, the risk-free rate is 6.5%, and the market risk premium is 5%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent.

Please be very detailed with your explanation

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Financial Management, Finance

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