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28 Sep 2019
ABC Company sotkc has a required return of 12%, and the stock sells for $40 per share. The firm just paid a dividend of $1.00, and the dividend is expected to grow by 30% per year for the next 4 years, so D4 = $1.00*(1.30*1.30*1.30*1.30). After "t=4", the dividend is expected to grow at a constant rate "X%" per year forever. What is the stock's expected constant growth rate after "t=4, i.e., what is X?"
ABC Company sotkc has a required return of 12%, and the stock sells for $40 per share. The firm just paid a dividend of $1.00, and the dividend is expected to grow by 30% per year for the next 4 years, so D4 = $1.00*(1.30*1.30*1.30*1.30). After "t=4", the dividend is expected to grow at a constant rate "X%" per year forever. What is the stock's expected constant growth rate after "t=4, i.e., what is X?"
Elin HesselLv2
28 Sep 2019
