Value of share of DCS under the no-growth assumption

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Company DCS has paid a dividend for many years. Its most recent annual dividend was $4.25, which was paid at the end of 2016. The risk-free rate is 1.5%, the current MRP is 7.2%, and the Beta for DCS is .8.

a) What would be the value of a share of DCS under the no-growth assumption?

b) If a 2% dividend growth rate were to be assumed, what would be the value of a share of DCS under the constant-growth assumption?

Reference no: EM131543495

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