Growth in the firm is described by relationship

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Reference no: EM131968349

1. If a dividend for a stock is expected to be $4 and the discount rate is 17%, while the dividend is expected to grow at 5% indefinitely, what is the expected spot price, right now?

2. A firm’s capitalization rate is 22%, while the firm invests in projects with ROE of 20%.The growth in the firm is described by this relationship: The firm’s year-end dividend will be $2 per share, while EPS is $5.What is the stock price?

Reference no: EM131968349

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