Calculate the economic value of the stock

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Reference no: EM133121843

At the end of the year 2020 Brown Bear Corporation paid dividends $2.78 per share. The company projects the following annual growth rates in dividends:

Year Growth Rate

2021 14%

2022 14%

2023 14%

2024 9%

2025 9%

2026 6%

From year 2027 onward growth in dividends is expected to remain constant at 3% per year. The required rate of return for this stock is 11.75%.

Calculate the economic value of the stock now (end of the Year 2020).

Reference no: EM133121843

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