Management of Oriole, a biotech firm, forecasted the following growth rates for the next three years: 35 percent, 28 percent, and 22 percent. Management then expects the company to grow at a constant rate of 9 percent forever. The company paid a dividend of $1.70 last week. If the required rate of return is 20 percent, what is the value of this stock? (Round intermediate calculations and final answer to 2 decimal places, e.g. 15.20.)
Management of Oriole, a biotech firm, forecasted the following growth rates for the next three years: 35 percent, 28 percent, and 22 percent. Management then expects the company to grow at a constant rate of 9 percent forever. The company paid a dividend of $1.70 last week. If the required rate of return is 20 percent, what is the value of this stock? (Round intermediate calculations and final answer to 2 decimal places, e.g. 15.20.)
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
Section: Chapter Questions
Problem 1PS
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X Your answer is incorrect.
Management of Oriole, a biotech firm, forecasted the following growth rates for the next three years: 35 percent, 28 percent, and 22
percent. Management then expects the company to grow at a constant rate of 9 percent forever. The company paid a dividend of $1.70
last week. If the required rate of return is 20 percent, what is the value of this stock? (Round intermediate calculations and final answer to
2 decimal places, e.g. 15.20.)
Value of stock
$
29.00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcf7465a1-1f06-4ade-b6d3-6ab1782d9bd3%2F60d28485-6878-456a-8704-a9d603027475%2Fhjky0a_processed.png&w=3840&q=75)
Transcribed Image Text:Current Attempt in Progress
X Your answer is incorrect.
Management of Oriole, a biotech firm, forecasted the following growth rates for the next three years: 35 percent, 28 percent, and 22
percent. Management then expects the company to grow at a constant rate of 9 percent forever. The company paid a dividend of $1.70
last week. If the required rate of return is 20 percent, what is the value of this stock? (Round intermediate calculations and final answer to
2 decimal places, e.g. 15.20.)
Value of stock
$
29.00
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