Using dividend growth model

Assignment Help Financial Management

Reference no: EM131529213

Assume today is December 31, 2013. Imagine Works Inc. just paid a dividend of $1.40 per share at the end of 2013. The dividend is expected to grow at 18% per year for 3 years, after which time it is expected to grow at a constant rate of 5% annually. The company's cost of equity (rs) is 9.5%. Using the dividend growth model (allowing for nonconstant growth), what should be the price of the company's stock today (December 31, 2013)? Round your answer to the nearest cent. Do not round intermediate calculations.

Reference no: EM131529213

Questions Cloud

Sketch the given function for the calues of t : Make a carefully labeled sketch for each of the following functions. Sketch case ? for values of 0 in the range 0 = ? = 6p.

The firm to recover its initial investment in this project : How long will it take the firm to recover its initial investment in this project?

Describing the important attributes of the company : Describing the important attributes of the company that should be considered when analyzing its consideration of social responsibility

Write a query to display average cost of books : Use the Ch08_Fact database shown in Figure P8.44. For problems with very large results sets, only the first several rows of output are shown in the following.

Using dividend growth model : Using the dividend growth model (allowing for nonconstant growth), what should be the price of the company's stock today

What is the goal of managed health care : What is the goal of managed health care? What does it strive to do?What is the role of a primary care physician (PCP) in a traditional HMO?

What will be the effect on profit of accepting the order : On the other hand, the company in China is willing to pay only $130 per unit. What will be the effect on profit of accepting the order?

Analyze how did each development influence american culture : What were the major developments in the evolution of mass media during the last century? How did each development influence American culture?

Identify some reasons that online learning succeeds or fails : Identify some reasons that online learning succeeds OR fails? Choose a point of view and support it using examples from outside sources.

User Account

All Pages