Calculate the present value of each dividend for years

Reference no: EM13268587

Company is growing quickly. Dividends are expected to grow at 20 percent per year during the next three years, 10 percent over the following year, and then 6 percent per year thereafter. The required rate of return on this stock is 12 percent. The company recently paid a dividend of $1.75.

a) Calculate the present value of each dividend for years 1-4.

b) Calculate the stock price as of the end of year 4.

c) Calculate the current stock price (P0).

d) Calculate the dividend yield (D1/P0).

Reference no: EM13268587

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