Compute the price per share if the market requires a return

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Problem 1: Dividend growth for the coming year is projected to be 27.00%. This rate will decline by 3 percentage points per year until it reaches the industry average of 9.00% (i.e. 24% in the second year, 21% in the third year, etc.). Once it reaches 9.00%, it will stay there indefinitely. The most recent dividend the company paid was $12.00 per share. Compute the price per share if the market requires a return of 18.00% per year.

Reference no: EM132736859

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