What should be the stock price today

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Django Inc. is a new IPO and will not pay any dividends for the next 5 years. Branco’s will pay $0.25 of dividends at the end of the six year. The firm plans to raise its dividend by 70% the year after that time. The firm, then, will reduce its dividend growth rate by 10% each year until it reaches the industry average of 10%, after which the firm will keep a constant growth rate, forever. The required rate of return for Django is 25% in the first four years, 15% in the next six years, and 12% thereafter. What should be the Django’s stock price today?

Reference no: EM131058581

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