What is the market value of stock

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Reference no: EM131990028

Kay’s Sewing Loft is expecting a period of the intense growth and has decided to retain more of its earning to help finance that growth. As a result, it is going to reduce its annual dividend by 10 percent a year for the next two years. After that, it will maintain a constant dividend of $2.00 a share. Last year the company paid a $3 dividend per share. What is the market value of this stock if the value of this stock if the required rate of return is 12.5 percent?

Reference no: EM131990028

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