PPG has the following dividend information

Finance Dec 10, 2020

PPG has the following dividend information. Calculate the annual growth and average growth rate. The stock beta is 1.12, the risk free rate is 1% and the market risk premium is 8%. What is the rs? What is the value of one share of PPG stock? BKH Divs % Change 2015 1.41 2016 1.56 2017 1.70 2018 1.86 2019 1.98 Average

Expert Solution

Annual Growth Rate:

BKH	DIVIDEND	% CHANGE
2015	1.41	-
2016	1.56	10.64%
2017	1.70	8.97%
2018	1.86	9.41%
2019	1.98	6.45%

Average Growth Rate :

Dividend Last Year = Dividend Base Year (1+g)^n-1

1.98 = 1.41 (1+g)^5-1

1.98 = 1.41 (1+g)⁴

(1+g)⁴= 1.98/1.41

please see the attached file for the complete solution

Download Solution Attachment (PDF/Doc)

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote