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    Dividend Discount Model - Value of Share

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    Corporation A has just paid its annual dividend of $2.50 a share. This dividend is expected to grow at a rate of 5% annually forever, and the appropriate discount rate for a company with Company A's risk profile at 11%.

    Use the dividend discount model to determine the value of a share of Polar Bear's stock.

    © BrainMass Inc. brainmass.com April 3, 2020, 9:21 pm ad1c9bdddf
    https://brainmass.com/business/accounting-for-corporations/dividend-discount-model-value-of-share-375458

    Solution Preview

    Corporation A has just paid its annual dividend of $2.50 a share. This dividend is expected to grow at a rate of 5% annually forever, and ...

    Solution Summary

    This solution helps with a question about the value of a share.

    $2.19

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