Value as on year 8=(D8*Growth rate)/(Discount rate-Growth rate)
=(2.2*1.032)/(0.14-0.032)
=21.02(Approx).
Hence current value=Future dividend and value*Present value of discounting factor(rate%,time period)
=2.2/1.14^8+21.02/1.14^8
=$8.14(Approx).
Netscrape Communications does not currently pay a dividend. You expect the company to begin paying a...
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Netscrape Communications does not currently pay a dividend. You expect the company to begin paying a dividend of $3.40 per share in 10 years, and you expect dividends to grow perpetually at 4.4 percent per year thereafter. If the discount rate is 11 percent, how much is the stock currently worth?
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A company will pay a $2 per share dividend in 1 year. The dividend in 2 years will be $4 per share, and it is expected that dividends will grow at 5% per year thereafter. The expected rate of return on the stock is 12%. a. What is the current price of the stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Current price b. What is the expected price of the stock in a year?...