Nonconstant growth valuation-estimate of stock current price

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Reference no: EM131059840

Nonconstant Growth Valuation A company currently pays a dividend of $1 per share (D0 = $1). It is estimated that the company's dividend will grow at a rate of 21% per year for the next 2 years, then at a constant rate of 6% thereafter. The company's stock has a beta of 1.9, the risk-free rate is 6%, and the market risk premium is 6%. What is your estimate of the stock's current price? Round your answer to the nearest cent.

Reference no: EM131059840

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