Problem:
The company has been hit hard due to increased competition. The co.'s analysts predict that earnings (and dividends) will decline at a rate of 5% annually forever. Assume that ks = 11% and Do = $2. What will be the price of the co's stock 3 year from now?
- 27.17
- 6.23
- 28.50
- 11.88
- 20.63