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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Question
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Step 1
The company has just paid a dividend D0 = $1.20
Growth rate in Year 1 = 20%
Growth rate in Year 2 = 15%
Growth rate in Year 3 = 10%
Perpetual growth rate “g” = 5%
Required return “r” = 12%
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