There is a stock which will not pay dividends for 6 years


There is a stock, which will not pay dividends for 6 years. Afterward, it will begin paying $1 out of a profit of $2.5 per share. We estimate that the firm will have an ROE of .20. The default free rate is 4%, the market premium is 6%, and the stock relates to the market 80%, in terms of the fluctuations of the two. Compute the price.

Request for Solution File

Ask an Expert for Answer!!
Financial Management: There is a stock which will not pay dividends for 6 years
Reference No:- TGS02142940

Expected delivery within 24 Hours