CX Enterprises has the following expected dividends: $1.13 in one year, $1.21 in two years, and $1.28 in three years. After that, its dividends are expected to grow at 4.4% per year forever (so that year 4's dividend will be 4.4% more than $1.28 and so on). If CX's equity cost of capital is 12.2%, what is the current price of its stock?

CX Enterprises has the following expected dividends: $1.13 in one year, $1.21 in two years, and $1.28 in three years. After that, its dividends are expected to grow at 4.4% per year forever (so that year 4's dividend will be 4.4% more than $1.28 and so on). If CX's equity cost of capital is 12.2%, what is the current price of its stock?

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter7: Corporate Valuation And Stock Valuation

Section: Chapter Questions

Problem 1P: Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1...

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