2. Finance
3. 1 suppose the company is expected to pay a divided...

# Question: 1 suppose the company is expected to pay a divided...

###### Question details

1. Suppose the company is expected to pay a divided of $2.5 and the required rate of return is 10% and the growth rate is 4%. What is the price of the stock after 5 years? after 10 years? after 12 years? 2. Suppose the company just paid a divided of$2.5 and the required rate of return is 10% and the growth rate is 4%. What is the price of the stock after 5 years? after 10 years? after 12 years?

3. ABC’s stock is currently selling for $60 per share. The firm is expected to pay a dividend of$3.60. If the cost of equity is 9%, compute the growth rate.