Annual growth rates in dividends

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At the end of the year 2016 Brown Bear Corporation paid dividends $3.34 per share. The company projects the following annual growth rates in dividends:

Year    Growth Rate

2017    13%

2018    13%

2019    13%

2020    10%

2021 7%

2022    5%

From year 2023 onward growth in dividends is expected to remain constant at 3% per year. The required rate of return for this stock is 10.26%. Calculate the economic value of the stock now (end of the Year 2016).

Reference no: EM131938932

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