One year from today, investors anticipate that Pa-Burger, Inc. stock will pay a dividend of Php 3.25 per share. After that, investors believe that the dividend will grow at 20% per year for the next three years (years 2 to 4) before settling down to a long-run growth rate of 4% (years 5 to infinity). The required rate of return on Pa-Burger stock is 15%. What is the current stock price?
One year from today, investors anticipate that Pa-Burger, Inc. stock will pay a dividend of Php 3.25 per share. After that, investors believe that the dividend will grow at 20% per year for the next three years (years 2 to 4) before settling down to a long-run growth rate of 4% (years 5 to infinity). The required rate of return on Pa-Burger stock is 15%. What is the current stock price?
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:One year from today, investors anticipate that Pa-Burger, Inc. stock will
pay a dividend of Php 3.25 per share. After that, investors believe that
the dividend will grow at 20% per year for the next three years (years 2
to 4) before settling down to a long-run growth rate of 4% (years 5 to
infinity). The required rate of return on Pa-Burger stock is 15%. What is
the current stock price?
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