Could I Industries just paid a dividend of $1.35 per share. The dividends are ex
ID: 2649035 • Letter: C
Question
Could I Industries just paid a dividend of $1.35 per share. The dividends are expected to grow at a 19 percent rate for the next 5 years and then level off to a 7 percent growth rate indefinitely. If the required return is 13 percent, what is the value of the stock today? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Could I Industries just paid a dividend of $1.35 per share. The dividends are expected to grow at a 19 percent rate for the next 5 years and then level off to a 7 percent growth rate indefinitely. If the required return is 13 percent, what is the value of the stock today? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Explanation / Answer
High Growth 19% Constant Growth 7% Ke 13% 0 1 2 3 4 5 Terminal Value 1.35 1.61 1.91 2.27 2.71 3.22 57.42 CF 1.61 1.91 2.27 2.71 60.64 PVCF 1.42 1.50 1.58 1.66 32.92 Value of Stock 39.07