Here dividend paid in 2019Q3 will be regarded as D1.
The table is filled and the numbers are shown below:
D1 | D2 | D3 | D4 | D5 | D6 | D7 | ||
Quarter | 2019Q3 | 2019Q4 | 2020Q1 | 2020Q2 | 2020Q3 | 2020Q4 | 2021Q1 | BEYOND |
Expected growth (g) | 20% | 15% | 15% | 15% | 15% | 2% | 2% | |
Expected dividend | 0.2500 | 0.3000 | 0.3450 | 0.3968 | 0.4563 | 0.5247 | 0.5352 |
The table, after rounding it to the nearest penny, is shown below:
Quarter | 2019Q3 | 2019Q4 | 2020Q1 | 2020Q2 | 2020Q3 | 2020Q4 | 2021Q1 | BEYOND |
Expected growth (g) | 20% | 15% | 15% | 15% | 15% | 2% | 2% | |
Expected dividend | 0.25 | 0.30 | 0.35 | 0.40 | 0.46 | 0.52 | 0.54 |
Now value of the stock = present value of (D1 to D7) + present value of dividends that will be paid in future after D7.
Value of dividends that will be paid after 2021Q1 = D8/(r-g) = (0.5352*(1.02))/(3% - 2%)
= $55.68
Thus stock value = 0.2500/(1.03) + 0.30/1.03^2 + 0.3450/1.03^3 + 0.3968/1.03^4 + 0.4563/1.03^5 + 0.5247/1.03^6 + 0.5352/1.03^7 + 55.68/1.03^7
= $58.14
Please help me to find the dividens in the nearest penny, and also determin the value...
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