Find value of stock based on the discounted dividends

Reference no: EM131931553

Question: ABC Corporation is a producer of Internet products. The company is currently not paying dividends, but it's chief financial officer thinks that starting in three years it can pay a dividend of $2 per share, and that this dividend will grow by 5 percent per year. Assuming that the cost of equity for ABC is 8 percent, value a share of stock based on the discounted dividends.

Reference no: EM131931553

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