question archive Nonconstant Dividend Growth Valuation$ A company currently pays a dividend of $2
Nonconstant Dividend Growth Valuation$ A company currently pays a dividend of $2
Subject:FinancePrice: Bought3
Nonconstant Dividend Growth Valuation$
A company currently pays a dividend of $2.6 per share (D0 = $2.6). It is estimated that the company's dividend will grow at a rate of 18% per year for the next 2 years, and then at a constant rate of 8% thereafter. The company's stock has a beta of 1.3, the risk-free rate is 8%, and the market risk premium is 3.5%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent.
