Chastains gardening supplies inc is a young start-up


Chastain's Gardening Supplies, Inc. is a young start-up company. It plans to pay no dividends over the next five years because it needs to reinvest all earnings in the firm to finance growth. The firm then plans to begin dividends of $3 per share, which are anticipated to grow at 10% per year for three years, and 6% per year in perpetuity beyond that. If the required return on Chastain's stock is 15%, what should be today's stock price?

Solution Preview :

Prepared by a verified Expert
Finance Basics: Chastains gardening supplies inc is a young start-up
Reference No:- TGS01401470

Now Priced at $10 (50% Discount)

Recommended (98%)

Rated (4.3/5)