Tre-Bien, Inc., is a fast-growing technology company. Management projects rapid growth of 30 percent for the next two years, then a growth rate of 17 percent for the following two years. After that, a constant-growth rate of 8 percent is expected. The firm expects to pay its first dividend of $2.56 a year from now. If dividends will grow at the same rate as the firm and the required rate of return on stocks with similar risk is 21 percent, what is the current value of the stock? (Round intermediate calculations and final answer to 2 decimal places, e.g. 15.25.) Current value $
Tre-Bien, Inc., is a fast-growing technology company. Management projects rapid growth of 30 percent for the next two years, then a growth rate of 17 percent for the following two years. After that, a constant-growth rate of 8 percent is expected. The firm expects to pay its first dividend of $2.56 a year from now. If dividends will grow at the same rate as the firm and the required rate of return on stocks with similar risk is 21 percent, what is the current value of the stock? (Round intermediate calculations and final answer to 2 decimal places, e.g. 15.25.) Current value $
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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Tre-Bien, Inc., is a fast-growing technology company. Management projects rapid growth of 30 percent for the next two years, then a growth rate of 17 percent for the following two years. After that, a constant-growth rate of 8 percent is expected. The firm expects to pay its first dividend of $2.56 a year from now. If dividends will grow at the same rate as the firm and the required
| Current value | $
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