You are evaluating a company that is growing quickly. Dividends are expected to grow at a rate of 30 percent for the next three years, with the growth rate falling off to a constant 4 percent thereafter. If the company just paid a dividend of $2.65 and the required return is ten percent, 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
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You are evaluating a company that is growing quickly. Dividends are expected to grow at
a rate of 30 percent for the next three years, with the growth rate falling off to a constant
4 percent thereafter. If the company just paid a dividend of $2.65 and the required
return is ten percent, 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
Transcribed Image Text:You are evaluating a company that is growing quickly. Dividends are expected to grow at a rate of 30 percent for the next three years, with the growth rate falling off to a constant 4 percent thereafter. If the company just paid a dividend of $2.65 and the required return is ten percent, 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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