Problem 8-18 Supernormal Growth [LO1] Synovec Company is growing quickly. Dividends are expected to grow at a rate of 24 percent for the next three years, with the growth rate falling off to a constant 5 percent thereafter. If the required return is 12 percent, and the company just paid a dividend of $3.85, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current share price
Problem 8-18 Supernormal Growth [LO1] Synovec Company is growing quickly. Dividends are expected to grow at a rate of 24 percent for the next three years, with the growth rate falling off to a constant 5 percent thereafter. If the required return is 12 percent, and the company just paid a dividend of $3.85, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current share price
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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![Problem 8-18 Supernormal Growth [LO1]
Synovec Company is growing quickly. Dividends are expected to grow at a rate of 24
percent for the next three years, with the growth rate falling off to a constant 5 percent
thereafter. If the required return is 12 percent, and the company just paid a dividend of
$3.85, what is the current share price? (Do not round intermediate calculations and
round your answer to 2 decimal places, e.g., 32.16.)
Current share price](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5b51219d-4384-4c8c-831e-610c6ddda0ca%2Fa51440b1-f7f8-476c-b132-82bbdd28ea5c%2Fqchnu5i_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 8-18 Supernormal Growth [LO1]
Synovec Company is growing quickly. Dividends are expected to grow at a rate of 24
percent for the next three years, with the growth rate falling off to a constant 5 percent
thereafter. If the required return is 12 percent, and the company just paid a dividend of
$3.85, what is the current share price? (Do not round intermediate calculations and
round your answer to 2 decimal places, e.g., 32.16.)
Current share price
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