Question

P7-15 (similar to) Question Help Common stock value Variable growth Lawrence Industries' most recent annual dividend was $1.61 per share (0, -$1.61), and the firm's required return is 16% Find the market value of Lawrence's shares when dividends are expected to grow at 20% annually for 3 years, followed by a 4% constant annual growth rate in years 4 to infinity The market value of Lawrence's shares is $16.7. (Round to the nearest cent.)

Answer 1

=1.61*(1.20/1.16)+1.61*(1.20/1.16)^2+1.61*(1.20/1.16)^3+1.61*(1.20/1.16)^3*1.04/(16%-4%)
=20.61795