At the end of the year 2020 Brown Bear Corporation paid dividends $3.39 per share. The company projects the following annual growth rates in dividends: Year Growth Rate 2021 13% 2022 13% 2023 13% 2024 11% 2025 6% 2026 4% From year 2027 onward growth in dividends is expected to remain constant at 3% per year. The required rate of return for this stock is 12.16%. Calculate the economic value of the stock now (end of the Year 2020).

At the end of the year 2020 Brown Bear Corporation paid dividends $3.39 per share. The company projects the following annual growth rates in dividends: Year Growth Rate 2021 13% 2022 13% 2023 13% 2024 11% 2025 6% 2026 4% From year 2027 onward growth in dividends is expected to remain constant at 3% per year. The required rate of return for this stock is 12.16%. Calculate the economic value of the stock now (end of the Year 2020).

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter9: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 2MC

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