auinoa Farms just paid a dividend of $3.80 on its stock. The growth rate in dividends is expected to be a constant 4 percent per year, indefinitely. Investors require a return of 12 percent on the stock for the first three yearsand a return of 10 percent for the next three years, and then a return of 8 percent thereafter. What is the current share price for the stock? (Do notround intermediate calculations and round your answer to 2 decimal places,e.g., 32.16.)
auinoa Farms just paid a dividend of $3.80 on its stock. The growth rate in dividends is expected to be a constant 4 percent per year, indefinitely. Investors require a return of 12 percent on the stock for the first three yearsand a return of 10 percent for the next three years, and then a return of 8 percent thereafter. What is the current share price for the stock? (Do notround intermediate calculations and round your answer to 2 decimal places,e.g., 32.16.)
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
Problem 1PS
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auinoa Farms just paid a dividend of $3.80 on its stock. The growth rate in dividends is expected to be a constant 4 percent per year, indefinitely. Investors require a return of 12 percent on the stock for the first three years
and a return of 10 percent for the next three years, and then a return of 8 percent thereafter. What is the current share price for the stock? (Do notround intermediate calculations and round your answer to 2 decimal places,e.g., 32.16.)
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