A7X Corp. just paid a dividend of $1.45 per share. The dividends are expected to grow...

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Finance

A7X Corp. just paid a dividend of $1.45 per share. The dividendsare expected to grow at 25 percent for the next 6 years and thenlevel off to a growth rate of 8 percent indefinitely.
If the required return is 15 percent, what is the price of thestock today?

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4.1 Ratings (822 Votes)

Step1 Dividend per share for the next 3 years Dividend in Year 0 D0 145 per share Dividend in Year 1 D1 18125 per share 145 x 125 Dividend in Year 2 D2 22656 per share 18125 x 125 Dividend in Year 3 D3 28320 per share 22656 x 125 See Answer

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A7X Corp. just paid a dividend of $1.45 per share. The dividends are expected to grow...

60.1K

Verified Solution

Question

Finance

A7X Corp. just paid a dividend of $1.45 per share. The dividendsare expected to grow at 25 percent for the next 6 years and thenlevel off to a growth rate of 8 percent indefinitely.
If the required return is 15 percent, what is the price of thestock today?

Answer & Explanation Solved by verified expert

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A7X Corp. just paid a dividend of $1.45 per share. The dividends are expected to grow...

60.1K

Verified Solution

Question

Finance

A7X Corp. just paid a dividend of $1.45 per share. The dividendsare expected to grow at 25 percent for the next 6 years and thenlevel off to a growth rate of 8 percent indefinitely.If the required return is 15 percent, what is the price of thestock today?

Answer & Explanation Solved by verified expert

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A7X Corp. just paid a dividend of $1.45 per share. The dividendsare expected to grow at 25 percent for the next 6 years and thenlevel off to a growth rate of 8 percent indefinitely.
If the required return is 15 percent, what is the price of thestock today?