What is the value of stock today

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Reference no: EM132031965

Whizz Corp. has recently paid a dividend of $3 per share. You expect that the dividend will be $3 next year (t=1), increase 20% the following year (t=2), then increase 10% the following year (t=3), and then grow at a rate of 5% indefinitely (after t=3). The company's assets are worth $150 million, and its debt is worth $75 million. Its asset beta is 2. You estimate that the risk-free rate is 5%, and the market risk premium is 5% as well. The company's tax rate is 0%. If your estimations are correct, what is the value of the stock today?

Reference no: EM132031965

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