Price of a Share
Not what you're looking for?
Whizzkid, Inc, is experiencing a period of rapid growth. Earnings per share is expected to grow at a rate of 15 percent during the next two years, 13 percent in the third year, 10 percent in the fourth year, and at a constant rate of 6 percent thereafter. The firm just provided $5.00 EPS for the last year. If the required rate of return on the stock is 17 percent, what is the price of a share of the stock today?
Purchase this Solution
Solution Summary
The solution calculates price of a share.
Solution Preview
You have not mentioned the Dividend amount. I assume the dividend for the last year D0= $5.00
The stock price is the discounted value of all the dividends to be received in subsequent years
Year growth Dividend
0 $5.00 ...
Purchase this Solution
Free BrainMass Quizzes
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.
Situational Leadership
This quiz will help you better understand Situational Leadership and its theories.
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce