Orkazana Corporation is experiencing rapid growth. Dividends are expected to grow at 30 percent per year during the next three years, 20 percent over the following year, and then 5 percent per year indefinitely. The required return on this stock is 12 percent, and the stock currently sells for $80 per share. What is the projected dividend for the coming year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Projected dividend

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 13P
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Orkazana Corporation is experiencing rapid growth. Dividends are expected to grow at
30 percent per year during the next three years, 20 percent over the following year, and
then 5 percent per year indefinitely. The required return on this stock is 12 percent, and
the stock currently sells for $80 per share. What is the projected dividend for the coming
year? (Do not round intermediate calculations and round your answer to 2 decimal
places, e.g., 32.16.)
Projected dividend
Transcribed Image Text:Orkazana Corporation is experiencing rapid growth. Dividends are expected to grow at 30 percent per year during the next three years, 20 percent over the following year, and then 5 percent per year indefinitely. The required return on this stock is 12 percent, and the stock currently sells for $80 per share. What is the projected dividend for the coming year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Projected dividend
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