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1 Jan 2018
The cash dividends of Stephanie Corporation have been growing at a rate of 25 percent for the last few years. Analysts expect this rate to continue for five more years and then fall to a more normal growth rate of 5 percent thereafter. The risk free rate of return is 4%. The market rate of return is 8.5%. The beta for the stock is 1.25. If the Stephanie Corporation has a current cash dividend of 25 cents per share per quarter, what is the present value of one share of its common stock?
The cash dividends of Stephanie Corporation have been growing at a rate of 25 percent for the last few years. Analysts expect this rate to continue for five more years and then fall to a more normal growth rate of 5 percent thereafter. The risk free rate of return is 4%. The market rate of return is 8.5%. The beta for the stock is 1.25. If the Stephanie Corporation has a current cash dividend of 25 cents per share per quarter, what is the present value of one share of its common stock?
Nestor RutherfordLv2
4 Jan 2018