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A company intends to pay a $1 dividend at the end of each of the next...

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Finance

A company intends to pay a $1 dividend at the end of each of thenext 3 years. After which it expects its dividends to increase by3% per year forever. The required return on the company’s equity is7%. What is the current price?

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3.6 Ratings (402 Votes)
Calculation of Share Price Since dividend for the 1St 3years is constant and after 3years there is growth of dividend ie increase in dividend by 3 each year Price of share Present value of dividend for the    See Answer
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