Assume next years dividend is 10 the market capitalization


Question - Company Z-prime's earnings and dividends per share are expected to grow by 5% a year. Its growth will stop after year 4. In year 5 and afterward, it will pay out all earnings as dividends. Assume next year's dividend is $10, the market capitalization rate is 8% and next year's EPS is $15. What is Z-prime's stock price?

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Accounting Basics: Assume next years dividend is 10 the market capitalization
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