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Your broker offers to sell you some shares of Daktronics common stock that paid a...

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Finance

Your broker offers to sell you some shares of Daktronics common stock that paid a dividend of $2.00 yesterday. Daktronicss dividend is expected to grow at 10% per year for the next 3 years and thereafter, become constant 6%. If you buy the stock, you plan to hold it for 3 years and then sell it. The appropriate discount rate is 12%. Address the following: A. Find the expected dividend for each of the next 3 years. B. What is the present value and total sum for all future dividends payment? C. What is the price of the stock 3 years from now? What is the present value of this expected future stock price? D. If you plan to buy the stock, hold it for 3 years, what is the most you should pay for it today? E. If the current price for the stock is $29.50, should you buy?

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