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Cotsakos Corporation has a current dividend (D0) =$ 1.60.  The constant growth rate of dividends is 5%/year. The required return on the stock is 13%.  Given this, please calculate the estimated value of the stock right now (P0).  Also, what do you think would be the value of the same stock at the end of one year, in other words, what would be P1?

Also, what would happen if the constant growth rate accelerated to 14%?

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M93041953

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