What is super tea company expected dividend stream over the


Normal tea companies grow at a constant rate of 5%. However, Super Tea company has tested a brand new tea that will lead to significant growth. The current dividend is $3.0, but over the next two years it will grow by 25%. By year 3, expectations are that Super Tea company will revert to the mean with 4% growth. Super T current beta is 2, with a risk-free rate of 2%, and the market risk premium at 5%. What is Super Tea company expected dividend stream over the next three years?

Solution Preview :

Prepared by a verified Expert
Finance Basics: What is super tea company expected dividend stream over the
Reference No:- TGS02821669

Now Priced at $10 (50% Discount)

Recommended (97%)

Rated (4.9/5)