What price should goodcoffee inc. set for its new stock

Reference no: EM133325664

Question: The fast-growing firm of GoodCoffee Inc. is planning its first issue of public stock. The firm will pay out its first dividend of $1 one year from today. Analysts expect annual dividends to grow at a rate of 12% per year for each of the following two years (year 2 and year 3). After that, the dividends will grow at a constant rate of 7% indefinitely. Investors require a 10% return from holding GoodCoffee stock.

a) What price should GoodCoffee Inc. set for its new stock?

Reference no: EM133325664

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