.Super Counting Stars Corporation paid a dividend of $1.15 per share over the last 12 months. The dividend is expected to grow at a rate of 22 percent over the next three years (supernormal growth). It will then grow at a normal, constant rate of 8.88 percent for the foreseeable future. The required rate of return is 11.11 percent (this will also serve as the discount rate). Compute the current value of the stock.

.Super Counting Stars Corporation paid a dividend of $1.15 per share over the last 12 months. The dividend is expected to grow at a rate of 22 percent over the next three years (supernormal growth). It will then grow at a normal, constant rate of 8.88 percent for the foreseeable future. The required rate of return is 11.11 percent (this will also serve as the discount rate). Compute the current value of the stock.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 16P

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