Compute the stock price based on the following information: Current dividend: $0.90 Periods of abnormally high dividend growth: Periodic "abnormally high" dividend growth rate: 15% Periodic dividend growth rate after the high growth period: 7.00% Periodic discount rate: 9.00%

Compute the stock price based on the following information: Current dividend: $0.90 Periods of abnormally high dividend growth: Periodic "abnormally high" dividend growth rate: 15% Periodic dividend growth rate after the high growth period: 7.00% Periodic discount rate: 9.00%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 1P

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Question

Compute the stock price based on the
following information:
Current dividend: $0.90
Periods of abnormally high dividend growth:
Periodic "abnormally high" dividend growth
rate: 15%
Periodic dividend growth rate after the high
growth period: 7.00%
Periodic discount rate: 9.00%

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