eBook Nonconstant Growth Valuation A company currently pays a dividend of $3.2 per share (Do = $3.2). It is estimated that the company's dividend will grow at a rate of 23% per year for the next 2 years, and then at a constant rate of 6% thereafter. The company's stock has a beta of 1.1, the risk-free rate is 8.5%, and the market risk premium is 4%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent. $

eBook Nonconstant Growth Valuation A company currently pays a dividend of $3.2 per share (Do = $3.2). It is estimated that the company's dividend will grow at a rate of 23% per year for the next 2 years, and then at a constant rate of 6% thereafter. The company's stock has a beta of 1.1, the risk-free rate is 8.5%, and the market risk premium is 4%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent. $

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 5P: A company currently pays a dividend of $2 per share (D0 = $2). It is estimated that the company’s...

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