You are planning to buy a stock that has just paid a dividend (D0) of...
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Accounting
You are planning to buy a stock that has just paid a dividend (D0) of $1.8. In addition, you anticipate the following growth rates:
Year 1 = 100%
Year 2 = 66%
Year 3 = -11%
Year 4 = 0%
Year 5 = 16%
Years 6 through infinity = 2%
Assume a discount rate of 12%. Based on this, what is the value of the stock today? (Round all dividend and price calculations to the nearest cent).
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