Problemthompson hauling co anticipates dividend growth, Ask an Expert

Accounting

Problem:

Thompson Hauling Co. anticipates dividend growth rates of 25%, 15% and 10% over the next three years, and a 6% long-term growth rate beyond that. Its current dividend is $1.80 per share. Thompson has a beta of 1.1, the market risk premium is 7 percent and the risk-free rate is 4.5 percent.

Required:

Question: What is the current price of Thompson?

$48.66
$40.53
$42.80
$30.77

Note: Provide support for your underlying principle.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91170973

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