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9 April, 12:47

Moody Farms just paid a dividend of $3.25 on its stock. The growth rate in dividends is expected to be a constant 5 percent per year indefinitely. Investors require a return of 14 percent for the first three years, a return of 12 percent for the next three years, and a return of 10 percent thereafter. What is the current share price

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  1. 9 April, 13:35
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    Cash Flow Year Present value

    - 0 0.00

    3.41 1 2.99

    3.58 2 2.76

    3.76 3 2.54

    3.95 4 2.38

    4.15 5 2.23

    4.36 6 2.09

    91.46 6 43.94

    Current share price = $58.93
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