A stock just paid an annual dividend of $2.5. The dividend is expected to grow...
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A stock just paid an annual dividend of $2.5. The dividend is expected to grow by 10% per year for the next 4 years. What is the expected dividend in 8 years?The growth rate of dividends will then fall steadily by 2% per year, from 10% in year 4 to 2% in year 8 and stay at that level forever. The required rate of return is 12%.
What is the expected dividend in 8 years?
What is the value of the stock in 8 years?
What is the value of the stock now?
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