Acompany currently pays a dividend of 225 per share d0 , Ask an Expert

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A company currently pays a dividend of $2.25 per share (D0 = $2.25). It is estimated that the company's dividend will grow at a rate of 16% per year for the next 2 years, then at a constant rate of 5% thereafter. The company's stock has a beta of 0.9, the risk-free rate is 4%, and the market risk premium is 6%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent.

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Financial Management, Finance

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