Estimated value per share of your firm stock

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Assume that the average firm in your company’s industry is expected to grow at a constant rate of 5.40% and that its dividend yield is 6.40%. Your company is about as risky as the average firm in the industry, but it has just successfully completed some R&D work that leads you to expect that its earnings and dividends will grow at a rate of 64.00% this year and 74.00% the following year, after which growth should return to the 5.40% industry average. If the last dividend paid was $3.40, what is the estimated value per share of your firm’s stock?

 

Reference no: EM131875215

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