Question

Zandev Inc. has been growing at a rate of 9.9 percent per year, and you expect...

Zandev Inc. has been growing at a rate of 9.9 percent per year, and you expect this growth rate in earnings and dividends to continue for another 3 years. The last dividend paid was $1.9. If the discount rate is 14.4% and the steady growth rate after 3 years is 4.6%, what should the stock price be today?

Homework Answers

Answer #1

Stock price today is equal to the present value of future dividends

Stock price = $23.24257662

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