Consider a stock with a price on May 1, 2015 of $72/share. The expected cash dividend in 2016 is $2.00 a share and is expected to grow 8% for the next 5 years. If you expect to sell your stock in 3 years for $95/share and the current interest rate is 10%, what is the current value of the stock?

Consider a stock with a price on May 1, 2015 of $72/share. The expected cash dividend in 2016 is $2.00 a share and is expected to grow 8% for the next 5 years. If you expect to sell your stock in 3 years for $95/share and the current interest rate is 10%, what is the current value of the stock?

Name: Consider a stock with a price on May 1, 2015 of $72/share. The expecte
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Description: Consider a stock with a price on May 1, 2015 of $72/share. The expected cash dividend in 2016 is $2.00 a share and is expected to grow 8% for the next 5 years. If you expect to sell your stock in 3 years for $95/share and the current interest rate is

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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