Paradise Tours, Inc. just paid a dividend of $2.50. Analysts expect the company's dividend to grow...
Paradise Tours, Inc. just paid a dividend of $2.50. Analysts expect the company's dividend to grow by 60% this year, by 30% in Year 2, by 20% in Year 3, and a constant rate of 4% in Year 4 and thereafter. The required return on PTI's stock is 15%. What is the Paradise Tours, Inc.'s dividend expected for the next year.
Homework Answers
Dividend expected for next year=$2.5*(1+Growth Rate)
=$2.5*1.6
which is equal to
=$4
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