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Boehm: Estimated Value Per Share, Infinite Dividend, Growth

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Boehm Incorporated is expected to pay a $1.50 per share dividend at the end of this year (i.e., D1 = $1.50). The dividend is expected to grow at a constant rate of 6% a year. The require rate of return on the stock, rS is 13%. What is the estimated value per share of Boehm's stock?

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Solution Summary

See excel attached for formula, example and computation illustrated for you for the Boehm stock.

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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