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Question - Non-constant Dividend Growth Valuation

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Question - Non-constant Dividend Growth Valuation

A company currently pays a dividend of $2.6 per share (D0 = $2.6). 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 6% thereafter. The company's stock has a beta of 1.4, the risk-free rate is 7.5%, and the market risk premium is 3.5%. What is your estimate of the stock's current price? Do not round intermediate calculations.

Reference no: EM132556460

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