Magnetic Corporation expects dividends to grow at a rate of 15.87% for the next two years. After two years, dividends are expected to grow at a constant rate of 6.43% , indefinitely. Magnetic’s required rate of return is 11.04% and they paid a $2.76 dividend today. Compute the following for Magnetic Corporation’s common stock:
a) Dividend at end of year 1 :
b) Dividend at end of year 2 :
c) Dividend at end of year 3 :
d) Price of stock at end of year 2 :
e) Price of stock today :