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  3. 5. in practice, a common way to value a share of s

5. In practice, a common way to value a share of stock when a company...

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Accounting

5. In practice, a common way to value a share of stock when a company pays dividends is to value the dividends over the next five years or so, then find the terminal stock price using a benchmark PE ratio. Suppose a company just paid a dividend of $1.24. The dividends are expected to grow at 19 percent over the next five years. In five years, the estimated payout ratio will be 35 percent and a benchmark PE will be 19. The required return is 11 percent. What are the projected dividends for each of the next five years

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