In: Finance
Dumbo Inc. just paid a dividend of $2.70. The company expects a super growth of 6% for the first 4 years and expect to grow at a constant rate of 3% after that. IF the current Ke is 6.5%, what is the expected price of this stock today?
Answer choices are:
100.31
104.52
67.59
88.65
92.69
The formulas and the inputs used is as follows:
The result is as follows:
So, the correct answer is option d "$88.65"