Storico Co. just paid a dividend of $315 per share. The company will increase its dividend by 20 percent next year and then reduce its dividend growth rate by 5 percentage points per year until it reaches the industry average of 5 percent dividend growth, after which the company will keep a constant growth rate forever. If the required return on the company's stock is 12 percent, what will a share of stock sell for today? (Do not round intermediete calculations ond round your answer to 2 decimal places, e,g., 32.16.) Stock price
Storico Co. just paid a dividend of $315 per share. The company will increase its dividend by 20 percent next year and then reduce its dividend growth rate by 5 percentage points per year until it reaches the industry average of 5 percent dividend growth, after which the company will keep a constant growth rate forever. If the required return on the company's stock is 12 percent, what will a share of stock sell for today? (Do not round intermediete calculations ond round your answer to 2 decimal places, e,g., 32.16.) Stock price
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 8P
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