Non-constant dividend patternthe rapid growth company is, Ask an Expert

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Non-Constant Dividend Pattern

The Rapid Growth Company is expected to pay a dividend of $1.00 at the end of this year

Thereafter, the dividends are expected to grow at the rate of 25% per year for 2 years, and then drop to 18% for 1 year, before settling at the industry average growth of 10% indefinitely

If you require a return of 16% to invest in a stock of this risk level, how much would you justified in paying for this stock?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92643060

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