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ABC Company currently pays a dividend of $2.15 per share, D0=2.15. It is estimated that the company’s dividend will grow at a rate of 30 percent per year for the next 3 years, then the dividend will grow at a constant rate of 8 percent thereafter. The market rate of return is 11 percent. What would you estimate is the stock’s current price?

User Colm Ryan
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1 Answer

1 vote

Answer:

$133.26

Step-by-step explanation:

Please see attachment

ABC Company currently pays a dividend of $2.15 per share, D0=2.15. It is estimated-example-1
User Bridgett
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