The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 20% a year for the next four years and then decreasing the growth rate to 5% per year. The company just paid its annual dividend in the amount of$1.00 per share. What is the current value of one share if the required rate of return is 9.25%?
TUTORIAL PREVIEW
TUTORIAL PREVIEW
| D0 = | 1 |
| D1 = 1 (1 + 0.20) = | 1.2 |
| D2 = 1.2 (1 + 0.20) = | 1.44 |
File name The Bell Weather Co.xls File type: xls
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