A company currently pays a dividend of 25 per share d0 25, Ask an Expert

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A company currently pays a dividend of $2.5 per share, D0 = 2.5. It is estimated that the company's dividend will grow at a rate of 18% percent per year for the next 2 years, then the dividend will grow at a constant rate of 7% thereafter. The company's stock has a beta equal to 0.8, the risk-free rate is 4.5 percent, and the market risk premium is 6 percent. What is your estimate is the stock's current price? Round your answer to the nearest cent.

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Financial Management, Finance

Category:- Financial Management
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