Planning to increase annual dividend

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Reference no: EM133907147

Question

Golden Goose Inc. (GG) just paid its annual dividend of $1.10 per share and is planning to increase its annual dividend by 10% for the next 2 years. AFTER THAT, the dividend will grow at an annual constant rate of 5% forever. (a) What is the value of GG stock today if the required return is 10%? (b) What would be the impact on GG stock price IF CENTRAL BANK INCREASES ITS INTEREST RATE AGAIN Please explain.

Reference no: EM133907147

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