ButterflyEVE
14.07.2019 •
Business
Bayou okra farms just paid a dividend of $3.95 on its stock. the growth rate in dividends is expected to be a constant 5 percent per year indefinitely. investors require a return of 14 percent for the first three years, a return of 12 percent for the next three years, and a return of 10 percent thereafter. what is the current share price?
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Ответ:
The current Dividend (D0) = $3.95
Growth in dividend = $3.95*(1+0.05) = $4.1475
D1 = $4.1475/(1+0.14) = $3.64
D2 = $4.1475*1.05/(1+0.14)^2 = $3.64
D3 = {$3.95*(1+0.05)^3}/(1+0.14)^3 = $3.35
D4 = {$3.95*(1+0.05)^4}/(1+0.12)^4 = $3.09
D5 = {$3.95*(1+0.05)^5}/(1+0.12)^5 = $3.05
D6 = {$3.95*(1+0.05)^6}/(1+0.12)^6 = $2.86
D7 = {$3.95*(1+0.05)^7} = $5.56
P6 = $5.56/(0.1 - 0.05) = $111.1609
Present value of P6 = $111.1609/(1.1)^6 = $62.7475
Current Price of the stock = $3.64+ $3.35 + $3.09 + $3.05 + $2.86 + $2.68 + $62.7475
Current Price of the stock = $81.42
Ответ:
hope i helped