Find what is estimate of stock current price for company

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Nonconstant Dividend Growth Valuation

Problem 1: A company currently pays a dividend of $3.4 per share (D0 = $3.4). It is estimated that the company's dividend will grow at a rate of 19% per year for the next 2 years, and then at a constant rate of 8% thereafter. The company's stock has a beta of 1.2, the risk-free rate is 9.5%, and the market risk premium is 6.5%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent

Reference no: EM132954296

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