What value would place on the stock


Problem:

ABC currently pays a dividend of $2 a share and the dividend will grow at 15$ per year for 3 years, and then at 10% for the next 3 years, later it is expected to grow at 5% forever.

1) What value would place on the stock at a rate of return of 18%?

2) Would your value change if you held the stock for only 3 years?

Please explain in details the steps of solving this problem and please attach any Excel sheets.

Solution Preview :

Prepared by a verified Expert
Finance Basics: What value would place on the stock
Reference No:- TGS02053342

Now Priced at $20 (50% Discount)

Recommended (90%)

Rated (4.3/5)