Zozan Corp has just paid a dividend of $2 per share. The company's dividends are expected to grow at 5% next year, 10% in the following year, 15% in the third year, and 20% in the fourth year (Dividend growths are based on the previous year's dividend payment). Finally, with the fifth year, the company's dividend growth will be fixed at 3% forever. Calculate the current share price if the required rate of return on this stock is 8% (Do not use the $ sign. If your answer is $ 123.45, then enter 123.45).

Zozan Corp has just paid a dividend of $2 per share. The company's dividends are expected to grow at 5% next year, 10% in the following year, 15% in the third year, and 20% in the fourth year (Dividend growths are based on the previous year's dividend payment). Finally, with the fifth year, the company's dividend growth will be fixed at 3% forever. Calculate the current share price if the required rate of return on this stock is 8% (Do not use the $ sign. If your answer is $ 123.45, then enter 123.45).

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 4P

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Zozan Corp has just paid a dividend of $2 per share. The company's dividends are expected to grow at 5% next year, 10% in the following year, 15% in the third year, and 20% in the fourth year (Dividend growths are based on the previous year's dividend payment). Finally, with the fifth year, the company's dividend growth will be fixed at 3% forever. Calculate the current share price if the required rate of return on this stock is 8% (Do not use the $ sign. If your answer is $123.45, then enter 123.45).
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