Calculate the expected stock price for each firm using the, Ask an Expert

Economics

Key drivers affecting the stock price

find out the expected stock price for each firm using the constant growth dividend discount model.

Today's dividend is $10. Next year dividend will Expected rate of return in the market is 15% and the firm's growth rate is 3%. The firm pays out half of its growth in dividends.

Firm B: Today's dividend is $10. Expected rate of return in the market is 15% and the firm's growth rate is 12%. The firm pays out 10% of its growth as dividend.

Comment on the key drivers affecting the stock price.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M928954

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