What is the current value of the stock

Reference no: EM133331696

Question: Jocelyn is considering investing in the Halloween Company, which she has been tracking for some time and has developed an in-depth knowledge of its dividend policy. The ?rm has just paid a dividend of $10 per share. This dividend is expected to grow at 15 percent per year for the next two years, to be followed by a year of zero dividend payment before resuming fixed yearly dividend payment of $15 for the following four years. Starting from Year 8, it will grow at 4 percent in perpetuity. What is the current value of the stock if Halloween's (yearly) required rate of return is 12 percent?

Reference no: EM133331696

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