Could I Industries just paid a dividend of $1.45 per share. The dividends are expected to grow at a rate of 17 percent for the next five years and then level off to a growth rate of 5 percent indefinitely. If the required return is 15 percent, what is the value of the stock today? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Could I Industries just paid a dividend of $1.45 per share. The dividends are expected to grow at a rate of 17 percent for the next five years and then level off to a growth rate of 5 percent indefinitely. If the required return is 15 percent, what is the value of the stock today? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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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Transcribed Image Text:Could I Industries just paid a dividend of $1.45 per share. The dividends are expected to grow at a rate of 17 percent
for the next five years and then level off to a growth rate of 5 percent indefinitely. If the required return is 15 percent,
what is the value of the stock today? (Do not round intermediate calculations. Round your answer to 2 decimal
places.)
Dividend
1.45 Years
5
GR 5 yrs
0.17
GR 5yrs +
0.05
Incorrect Incorrect Incorrect Incorrect
Incorrect Incorrect Incorrect Incorrect
Required return
0.15
Price
27.1338968
1.6965
-0.02
0.41830322 1-
1.5225
0.1
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