Hank's Barbecue just paid a dividend of $2.30 per share. The dividends are expected to grow at a 17.0 percent rate for the next five years and then level off to a 12.0 percent growth rate indefinitely. If the required return is 15.0 percent, what is the value of the stock today? What if the required return is 20.0 percent? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Po -15%) Po (k=20%)

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
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Hank's Barbecue just paid a dividend of $2.30 per share. The dividends are expected to grow at a 17.0 percent rate for the next five
years and then level off to a 12.0 percent growth rate indefinitely. If the required return is 15.0 percent, what is the value of the stock
today? What if the required return is 20.0 percent? (Do not round intermediate calculations. Round your answer to 2 decimal
places.)
Po -15%)
Po (k=20%)
Transcribed Image Text:Hank's Barbecue just paid a dividend of $2.30 per share. The dividends are expected to grow at a 17.0 percent rate for the next five years and then level off to a 12.0 percent growth rate indefinitely. If the required return is 15.0 percent, what is the value of the stock today? What if the required return is 20.0 percent? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Po -15%) Po (k=20%)
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