Calculate wme expected dividends

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Reference no: EM132941807

It is now January 1, 2016. Wayne-Martin Electric Inc. (WME) has just developed a solar panel  capable of generating 200 percent more electricity than anv solar panel currently on the market. As a result, WME is expected to experience a IS percent annual growth rate for the next 3 years. BV the end of 3 years, other firms will have developed comparable technology, and WME's growth rate will slow to S percent per year indefinitely. Stockholders require a return (cost of equity) of 12 percent on WME's stock. The most recent annual dividend of 201S (DO), which was paid vesterdav, was Sl.7S per share.

Question (a) calculate WME's expected dividends for 2016, 2017, and 2018.

Question (b) Calculate the value of the stock today. (Proceed by finding the present value of the dividend)

Reference no: EM132941807

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