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What is the value of a prescott pharmaceuticals share

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Reference no: EM133002072

Prescott Pharmaceuticals will pay an annual dividend of $1.13 one year from now. Analysts expect this dividend to grow at 13.9% per year thereafter until the end of year 8. After this period, growth will level off at 3.0% per year (that is, the t=9 cash flow will be 3.0% bigger than that the t=8 cash flow). According to the dividend-discount model, what is the value of a Prescott Pharmaceuticals share if the firm's equity cost of capital is 13.0%?

Reference no: EM133002072

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