Concept explainers
The company will pay a dividend of $0.50 at the end of 2 years which is then expected to grow at a rate of 6%. Required
Gordon constant growth model is used to determine the value of a stock. The model assumes that the dividend paid by the company would continue to grow at a constant rate in the foreseeable future. The
Value of the stock when the dividends are growing at a constant rate is
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