Givens, Inc., is a fast-growing technology company that paid a $1.25 dividend last week. The company's expected dividend growth rates over the next four years are as follows: 23 percent, 35 percent 37 percent, and 30 percent. The company then expects to settle down to a constant-growth rate of 9 percent annually. If the required rate of return is 12 percent, what is the present value of the dividends? (Do not round intermediate calculations. Round final answer to two decimal places $83.61 $91.23 $87.37
Givens, Inc., is a fast-growing technology company that paid a $1.25 dividend last week. The company's expected dividend growth rates over the next four years are as follows: 23 percent, 35 percent 37 percent, and 30 percent. The company then expects to settle down to a constant-growth rate of 9 percent annually. If the required rate of return is 12 percent, what is the present value of the dividends? (Do not round intermediate calculations. Round final answer to two decimal places $83.61 $91.23 $87.37
Chapter7: Valuation Of Stocks And Corporations
Section: Chapter Questions
Problem 21P
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Transcribed Image Text:Givens, Inc., is a fast-growing technology company that paid a $1.25 dividend last week. The
company's expected dividend growth rates over the next four years are as follows: 23 percent, 35
percent 37 percent, and 30 percent. The company then expects to settle down to a constant-growth
rate of 9 percent annually. If the required rate of return is 12 percent, what is the present value of
the dividends? (Do not round intermediate calculations. Round final answer to two decimal places
$83.61
$91.23
$87.37
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