However the dividend for year 5 will be 250 per share and


The Scott Building Company has fallen on hard times. Its management expects to pay no dividends for the next 4 years. However, the dividend for year 5 will be $2.50 per share, and the dividend is expected to grow at a rate of 11% for years 6 & 7, 9% for year 8, and 6% every year thereafter. If the required return for SBC is 20%, what is the intrinsic value of the stock?

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Financial Management: However the dividend for year 5 will be 250 per share and
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