Starkiller Base Inc. expects to have a changing dividend policy over the next few years starting with the dividend that they just paid of $4.17. In the following year their dividend will grow by 24.3% and in the year after by 18.4%. Following that they expect their dividends to continue growing at a constant rate of 4.4% forever. If the required rate of return for Starkiller Base is 11.6% per year, what is the price today of their shares?
Starkiller Base Inc. expects to have a changing dividend policy over the next few years starting with the dividend that they just paid of $4.17. In the following year their dividend will grow by 24.3% and in the year after by 18.4%. Following that they expect their dividends to continue growing at a constant rate of 4.4% forever. If the required rate of return for Starkiller Base is 11.6% per year, what is the price today of their shares?
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter8: Basic Stock Valuation
Section: Chapter Questions
Problem 2P
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Starkiller Base Inc. expects to have a changing dividend policy over the next few years starting with the dividend that they just paid of $4.17. In the following year their dividend will grow by 24.3% and in the year after by 18.4%. Following that they expect their dividends to continue growing at a constant rate of 4.4% forever. If the required
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