ABC Industries is expected to enjoy a very rapid growth rate in dividends of 30 percent...

ABC Industries is expected to enjoy a very rapid growth rate in dividends of 30 percent a year for the next 3 years. This growth rate is then expected to slow to 20 percent a year for the next 5 years. After that time, the growth rate is expected to be 6 percent a year. D0 is $2. The beta for this stock is 1.5. The expected return on the market is 11 percent, and the risk free rate is 5 percent. The required rate of return is 20 percent. What is the estimated price of the stock?

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jeff jeffy answered 2 years ago

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Mobray Corp. is experiencing rapid growth. Dividends are expected to grow at 28 percent per year during the next three years, 18 percent over the following year, and then 6 percent per year indefinitely. The required return on this stock is 11 percent, and the stock currently sells for $68 per share. What is the projected dividend for the coming year?

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