What is the value Per share of your firm's stock?​

timer Asked: Nov 18th, 2015
account_balance_wallet $5

Question Description

The company has a required rate of return 7%. The company has completed a new project that is expected to grow dividends at a rate of 50% the first year and 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 your firm's stock?

Tutor Answer

School: New York University

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

value Per share = 1*1.5/1.07 + 1*1.5*1.25/1.07^2 + (1*1.5*1.25*1.06/(7%-6%))/1.07^2= 176.64

Please let me know if you need any clarification. I'm always happy to answer your questions.

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awesome work thanks

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