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What is the constant growth rate implied by current price

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Reference no: EM132971483

Problem - Know-Gro Company's stock is currently selling for $32.12 per share. The market requires a 12 percent annual return on Know-Gro's stock and forecasts annual dividends at times 1, 2 and 3 of $1.15, $1.50 and $2.00 per share. The time 4 dividend is predicted to be $3.2 and grow at a constant annual rate in perpetuity thereafter. What is the constant growth rate implied by the current price?

Reference no: EM132971483

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