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Common stock valuelong dashVariable growth   Lawrence​ Industries' most recent annual dividend was ​$2.46 per share ​(D0equals$...

Common stock valuelong dashVariable growth   Lawrence​ Industries' most recent annual dividend was ​$2.46 per share ​(D0equals$ 2.46​), and the​ firm's required return is 12​%. Find the market value of​ Lawrence's shares when dividends are expected to grow at 15​% annually for 3​ years, followed by a 7​% constant annual growth rate in years 4 to infinity.

The market value of​ Lawrence's shares is ​$ . ​(Round to the nearest​ cent.)

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Answer #1

D0 = 2.46

D1 = 2.46( 1+ 0.15) = 2.829

D2 = 2.829( 1+ 0.15) = 3.25335

D3 = 3.25335 ( 1+ 0.15) = 3.7413525

Value of Share =

=

= $ 64.77

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