ABC company is growing at a constant rate of 8% every year. Last week the company paid a dividend of $2.8. If dividends are expected to grow at the same rate as the fi rm and the required rate of return is 12 percent, what should be the stock’s price four years from now? Show your calculation.
ABC company is growing at a constant rate of 8% every year. Last week the company paid a dividend of $2.8. If dividends are expected to grow at the same rate as the fi rm and the required rate of return is 12 percent, what should be the stock’s price four years from now? Show your calculation.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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ABC company is growing at a constant rate of 8% every year. Last week the company paid a dividend of $2.8. If dividends are expected to grow at the same rate as the fi rm and the required
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