Tin-Tin Waste Management, Inc., is growing rapidly. Dividends are expected to grow at rates of 30 percent, 35 percent, 25 percent, and 18 percent over the next four years. Thereafter, management expects dividends to grow at a constant rate of 7 percent. The stock is currently selling at $47.25, and the required rate of return is 15.0 percent. Compute the dividend for the current year (D0)
Dividend $
is expected to grow rapidly at a rate of 35 percent for the next seven years. The company's first dividend, to be paid three years from now, will be $5. After seven years, the company (and the dividends it pays) will grow at a rate of 9.50 percent. What is the value of Diaz stock with a required rate of return of 14 percent?
Value of stock in $