What is the value per share of you firm's stock?

Mathematics
Tutor: None Selected Time limit: 1 Day

Your company has a required rate of return 7%. The company has completed a new
20
project that
is expected to grow dividends at a rate of 50% the first year an
d 25% the
following year, after which growth should be at a constant rate of 6%. The last dividend paid was $1.00. What is the value per share of you firm's stock?

Nov 18th, 2015

Thank you for the opportunity to help you with your question!

Price = (1*1.50)/1.07 + (1*1.50*1.25)/1.07^2 + (1*1.50*1.25)/(.07-.06)/1.07^3

= 156.10


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Nov 18th, 2015

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