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

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Reference no: EM132235050

In this scenario:

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.

1) What is the price of the stock at the end of year 4

2) What should be the stock price today

Reference no: EM132235050

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