After seven years the firm will grow at a constant rate of


Quansi, Inc., management expects to pay no dividends for the next six years. It has projected a growth rate of 25 percent for the next seven years. After seven years, the firm will grow at a constant rate of 5 percent. Its first dividend, to be paid in year 7, will be $3.37. If the required rate of return is 19 percent, what is the stock worth today? (Round intermediate calculations and final answer to 2 decimal places, e.g. 15.20.)

Solution Preview :

Prepared by a verified Expert
Business Management: After seven years the firm will grow at a constant rate of
Reference No:- TGS02610634

Now Priced at $10 (50% Discount)

Recommended (92%)

Rated (4.4/5)