What should be the stock price today

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Reference no: EM131881694

Non-Constant growth stock Valuation Stewart Industries just paid a $3.00 per share dividend on its common stock yesterday (i.e., D0 = $3.00).

The dividend is expected to grow 20 percent a year for the next four years, after which time the dividend is expected to grow at a constant rate of 5 percent a year for ever. You assume a 14 percent discount rate.

a. What is the price of the stock at the end of year 4

b. What should be the stock price today

Reference no: EM131881694

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