Assume that the average firm in your company's industry is expected to grow at a constant...

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Assume that the average firm in your company's industry isexpected to grow at a constant rate of 5% and that its dividendyield is 8%. Your company is about as risky as the average firm inthe industry and just paid a dividend (D0) of $2. You expect thatthe growth rate of dividends will be 50% during the first year(g0,1 = 50%) and 30% during the second year (g1,2 = 30%). AfterYear 2, dividend growth will be constant at 5%. What is theestimated value per share of your firm’s stock? Do not roundintermediate calculations. Round your answer to the nearestcent.

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Step1 Required rate of return on your companys stock Required rate of return on your companys stock Dividend Growth Rate Dividend Yield 500 800 1300 Step2 Dividend per share for the next two years See Answer

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Assume that the average firm in your company's industry isexpected to grow at a constant rate of 5% and that its dividendyield is 8%. Your company is about as risky as the average firm inthe industry and just paid a dividend (D0) of $2. You expect thatthe growth rate of dividends will be 50% during the first year(g0,1 = 50%) and 30% during the second year (g1,2 = 30%). AfterYear 2, dividend growth will be constant at 5%. What is theestimated value per share of your firm’s stock? Do not roundintermediate calculations. Round your answer to the nearestcent.