BlueCorp. is growing quickly. Dividends are expected to grow at a rate of 16 percent for the next three years, with the growth rate falling off to a constant 5.4 percent thereafter. If the required return is 8.93 percent and the company just paid a $3.09 dividend, what is the current share price? Answer to two decimals.
BlueCorp. is growing quickly. Dividends are expected to grow at a rate of 16 percent for the next three years, with the growth rate falling off to a constant 5.4 percent thereafter. If the required return is 8.93 percent and the company just paid a $3.09 dividend, what is the current share price? Answer to two decimals.
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 16P
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BlueCorp. is growing quickly. Dividends are expected to grow at a rate of 16 percent for the next three years, with the growth rate falling off to a constant 5.4 percent thereafter. If the required return is 8.93 percent and the company just paid a $3.09 dividend, what is the current share price? Answer to two decimals.
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