Explore BrainMass

Explore BrainMass

    Constant Growth Valuation

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Boehm Incorporated is expected to pay a $1.70 per share dividend at the end of this year (i.e., D1 = $1.70). The dividend is expected to grow at a constant rate of 4% a year. The required rate of return on the stock, rs, is 13%. What is the value per share of the company's stock?

    © BrainMass Inc. brainmass.com October 2, 2020, 2:48 am ad1c9bdddf
    https://brainmass.com/business/business-math/constant-growth-valuation-example-457322

    Solution Preview

    Using Constant Growth Model,

    Stock price = Expected ...

    Solution Summary

    The solution finds the value per share using constant growth valuation.

    $2.19

    ADVERTISEMENT