In: Finance
Suppose Acap Corporation will pay a dividend of $1.9 per share at
the end of this...
Suppose Acap Corporation will pay a dividend of $1.9 per share at
the end of this year and $2.15 per share next year. You expect
Acap’s stock price to be $35 in two years. Assume that Acap’s
equity cost of capital is 13%. What price would you be willing to
pay for a share of Acap stock today?