Supernormal Growth (LO1) Duffs Co. is growing quickly. Dividends are expected to grow at a24% rate for the next three years, with the growth rate falling off to a constant 6% thereafter. If the required return is 11% and the company just paid a $1.90 dividend, what is the current share price?
Supernormal Growth (LO1) Duffs Co. is growing quickly. Dividends are expected to grow at a24% rate for the next three years, with the growth rate falling off to a constant 6% thereafter. If the required return is 11% and the company just paid a $1.90 dividend, what is the 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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Supernormal Growth (LO1) Duffs Co. is growing quickly. Dividends are expected to grow at a24% rate
for the next three years, with the growth rate falling off to a constant 6% thereafter. If the required return
is 11% and the company just paid a $1.90 dividend, what is the current share price?
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