Stock Valuation
Not what you're looking for? Search our solutions OR ask your own Custom question.
A company is expanding rapidly and is not paying dividends at this time. Investors expect it to begin paying dividends beginning 3 years from today starting at $1.00. The dividend should grow rapidly - at 50% a year during years 4 and 5. After year 5 the company should grow at 8%/year. If the required return on the stock is 15% what is the value of the stock today?
© BrainMass Inc. brainmass.com December 15, 2022, 6:34 pm ad1c9bdddfhttps://brainmass.com/business/finance/stock-valuation-156987
Solution Preview
A company is expanding rapidly and is not paying dividends at this time. Investors expect it to begin paying dividends beginning 3 years from today starting at $1.00. The dividend should grow rapidly - at 50% a year during years 4 and 5. After year 5 the company should grow at 8%/year. If the required return on ...
Solution Summary
The solution values a stock.
$2.49