Assume that the average firm in your companys industry is


Assume that the average firm in your company's industry is expected to grow at a constant rate of 6% and that its dividend yield is 7%. Your company is about as risky as the average firm in the industry and just paid a dividend of $1. You expect that the growth rate of dividends will be 50% during the first year and 25% during the second year. After Year 2, divdend growth will be constant at 6%. What is the required rate of return on your company's stock? What is the estimated value per share of your firm's stock?

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Financial Management: Assume that the average firm in your companys industry is
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