The required return on this stock is 10 what is the stocks


Suppose that a stock pays out all of its earnings in dividends and just paid a dividend of $1.25 per share. The dividend is expected to grow by 6% next year, 10% in the second year, 8% in the third year and at a constant 5% forever thereafter. The required return on this stock is 10%. What is the stock's price?

Solution Preview :

Prepared by a verified Expert
Finance Basics: The required return on this stock is 10 what is the stocks
Reference No:- TGS02850482

Now Priced at $10 (50% Discount)

Recommended (90%)

Rated (4.3/5)