Over the past 10 years the dividends of party time inc have, Ask an Expert

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Over the past 10 years, the dividends of Party Time, Inc. have grown at an annual rate of 15 percent. The current (D0) dividend is 3 per share.

This dividend is expected to grow to 3.40 next year, then grow at an annual rate of 10 percent for the following two years and 6 percent per year thereafter. You require a 15 percent rate of return on this stock.

a. What would you be willing to pay for a share of Party Time stock today

b. What price would you anticipate the stock selling for at the beginning of year 3

c. If you anticipated selling the stock at the end of two years,how much would you pay for it today.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M93062571

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