Financial management what is current share price ?

Marcel Co 

is growing quickly.

Dividends are expected to grow at a 30 percent rate for the next three years, with the growth rate falling off to a constant 6 percent thereafter. 

If the required return is 13 percent and the company just paid a $1.80 dividend current share price?

3 Answers

Relevance
  • 3 weeks ago

    Price = Present value of cash flows ( 3 year 30% growing annuity + 6% growing perpetuity)

    PV = 1.8 x (1+30%)^3 x (1+6%)/(13%-6%) x 1/(1+13%)^3 + 1.8 x (1+30%) x (1-(1+30%)^3 x (1+13%)^-3)/(13%-30%) =  48.696

  • Anonymous
    3 weeks ago

    Homework Section >>>>>>>>>>>>

  • Judy
    Lv 7
    3 weeks ago

    do your own homework.

Still have questions? Get answers by asking now.