Chartreuse County Choppers Inc. is experiencing rapid growth. The company expects dividends to grow at 25% per year for the next 9 years before leveling off at 6% into perpetuity. The required return on the company's stock is 12%. If the dividend per share just paid was $1.05, what is the stock price?© BrainMass Inc. brainmass.com October 9, 2019, 9:04 pm ad1c9bdddf
The stock price is the present value of all dividends. Since the dividends are growing at 25% for 9 years and then have a constant growth rate, we need to calculate the dividends for each of the first nine years. From year 10, the growth ...
The expert examines the two-stage dividend growth for Chartreuse County Choppers Inc.