Calculate the price with the constant dividend growth model


Sisters Corp expects to earn $5 per share next year. The firm’s ROE is 15% and its plowback ratio is 60%. If the firm’s market capitalization rate is 10%.

a. Calculate the price with the constant dividend growth model. (Do not round intermediate calculations.)

b. Calculate the price with no growth.

c. What is the present value of its growth opportunities? (Do not round intermediate calculations.)

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Financial Management: Calculate the price with the constant dividend growth model
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