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ABC Company growth rate

 ABC Company operates 18 brands. The dividend yield trailing twelve months is 0.784%, and it’s current market price per share is USD $50.89. The company group 's year to date return is -25.89%.

 

date

Price per share (USD $)

Dividend per share (USD $)

2019 Dec

68.87

1.18

2018 Dec

56.82

1.1295

2017 Dec

67.17

1.0292

2016 Dec

50.24

1.0884

2015 Dec

50.65

1.0488

2014 Dec

53.08

0.9735

(a)Calculate according to the Constant Growth Model, the ABC Company's growth rate using the provided historical data

(b)Suppose the company is expected to grow at the rate calculated in (a) for 3 more years, and thereafter, grow at a rate of 5% for the foreseeable future. What is the current value of ABC company common stock to an investor who is able to earn 5.8% from investments with a similar level of risk? The beta of ABC Company is 0.92.


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