Super-growth company just declared dividend per share

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Reference no: EM131054848

The Super-Growth Company just declared a dividend per share of $5.00. Analysts expect the dividends to grow at 23% for the next three years, then drop to 17% per year for 2 years, before converging to the industry median growth rate of 8 %. The company's beta has been estimated at 1.25, treasury securities are currently yielding 4%, and the market expected rate of return is estimated to be 13%. If the stock is currently trading for $110, would you buy it? Explain your answer.

Reference no: EM131054848

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