Computing the fair price for the stock


You have forecast that United Sports, Inc. will pay a dividend of $.30 next year (in time 1), $.60 two years from now (in time 2) and $1.00 three years from now (in time 3). For dividends beyond three years, you assume they will increase at 6% per year from the prior year. If the discount rate is 9%, calculate a fair price for the stock of United Sports, Inc.

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Finance Basics: Computing the fair price for the stock
Reference No:- TGS039756

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