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Compute the dividends for each of the next three years

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Question - Wildhorse Pharma is a fast-growing drug company. Management forecasts that in the next three years, the company's dividend growth rates will be 30 percent, 28 percent, and 24 percent, respectively. Last week it paid a dividend of $1.89. After three years, management expects dividend growth to stabilize at a rate of 8 percent. The required rate of return is 14.50 percent. Compute the dividends for each of the next three years, and calculate their present value.

Reference no: EM132565605

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