Financial analysts expect theron cos earnings and dividends


Dividend discount model

Financial analysts expect Theron Co.'s earnings and dividends to grow at a rate of 16 percent during the next three years, 12 percent in the fourth and fifth years, and at a constant rate of 6 percent thereafter. Theron's dividend which has just has been paid, was $1.20. If the expected rate of return on the stock of 12 percent, what is the price of the stock today?

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Financial Management: Financial analysts expect theron cos earnings and dividends
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