What should be the current stock price of hope

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Reference no: EM13980669

Hope Industries just paid a dividend of $2.00 per share (i.e., D0 = $2.00). Analysts expect the company's dividend to grow at 30 percent this year and at 20 percent in year 2. After two years the dividend is expected to grow at a constant rate of 4 percent. The cost of common stock (rs) is 8%.

1) What should be the current stock price of Hope?

2) Using EXCEL two-way data table, please show me the stock prices when the constant growth rate changes from 1 to 7% with 1% increment and the cost of common stock (rs) changes from 5 to 11% with 1% increment.

Reference no: EM13980669

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