What is your estimate of the stock current price

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Reference no: EM13939724

A company currently pays a dividend of $1.5 per share (D0 = $1.5). It is estimated that the company's dividend will grow at a rate of 16% per year for the next 2 years, then at a constant rate of 7% thereafter. The company's stock has a beta of 1.6, the risk-free rate is 5%, and the market risk premium is 3%. What is your estimate of the stock's current price? Round your answer to the nearest cent.

Reference no: EM13939724

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