Value is placed on the stock at the higher growth rate

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Reference no: EM132050202

Nixon Inc. currently pays $2.25 per share in dividends on its common stock. Analysts differ over the long run growth potential for the firm. Some believe the dividends will grow at 7.00% forever, while conservative analysts believe the firm will grow at 3.00% long term. The required return to own the stock is estimated at 16.00%. What intrinsic value is placed on the stock at the higher growth rate? Answer Format: Currency: Round to: 2 decimal places.

Reference no: EM132050202

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