Quinoa Farms just paid a dividend of $3.50 on its stock. The growth rate in dividends is expected to be a constant 5 percent per year, indefinitely. Investors require a return of 13 percent on the stock for the first three years and a return of 11 percent for the next three years, and then a return of 9 percent thereafter. What is the current share price for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current share price

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 12P
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Quinoa Farms just paid a dividend of $3.50 on its stock. The growth rate in dividends is
expected to be a constant 5 percent per year, indefinitely. Investors require a return of 13
percent on the stock for the first three years and a return of 11 percent for the next three
years, and then a return of 9 percent thereafter. What is the current share price for the
stock? (Do not round intermediate calculations and round your answer to 2 decimal
places, e.g., 32.16.)
Current share price
Transcribed Image Text:Ok t t Quinoa Farms just paid a dividend of $3.50 on its stock. The growth rate in dividends is expected to be a constant 5 percent per year, indefinitely. Investors require a return of 13 percent on the stock for the first three years and a return of 11 percent for the next three years, and then a return of 9 percent thereafter. What is the current share price for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current share price
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