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Homework answers / question archive / Today your company paid a dividend (D0) of $3 per share
Today your company paid a dividend (D0) of $3 per share. The growth rate of the dividend is expected to be 10% for the next two years, and then 6% thereafter. The cost of capital is 10%. For each question, choose the closest answer.
What do you expect the dividend to be in three years from now (D3) (to the nearest cent)?
a) $3.30 b) $3.57 c) $3.99 d) $3.85
What is your estimate of your firm’s stock price two years from now (P2)?
a) $96.20 b) $79.55 c) $85.55 d) $78.31 e) $72.31
What is your estimate of your firm’s current stock price (P0)?
a) $96.20 b) $79.55 c) $85.55 d) $78.31 e) $72.31
