Disney Co. will pay a dividend of $23.00, which will increase by 4 percent each year over the following three years and then grow at an annual rate of 6 percent forever. You expect a 14 percent return on your invested capital. What price would you pay for a share in this company? (Do not round "PV factor and other intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.)
Disney Co. will pay a dividend of $23.00, which will increase by 4 percent each year over the following three years and then grow at an annual rate of 6 percent forever. You expect a 14 percent return on your invested capital. What price would you pay for a share in this company? (Do not round "PV factor and other intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.)
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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![Disney Co. will pay a dividend of $23.00, which will increase by 4 percent each year over the following three years and then grow at
an annual rate of 6 percent forever. You expect a 14 percent return on your invested capital.
What price would you pay for a share in this company? (Do not round "PV factor" and other intermediate calculations. Round the
final answer to 2 decimal places. Omit S sign in your response.)
Price](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa5662197-50bd-4d63-a5ca-c2b9744d9cef%2F4117b0f5-f3cd-4cf9-9e65-9b83ee6d62c8%2F97x9nti_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Disney Co. will pay a dividend of $23.00, which will increase by 4 percent each year over the following three years and then grow at
an annual rate of 6 percent forever. You expect a 14 percent return on your invested capital.
What price would you pay for a share in this company? (Do not round "PV factor" and other intermediate calculations. Round the
final answer to 2 decimal places. Omit S sign in your response.)
Price
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