Company A is not expected to pay any dividends in the following two years. It will start paying dividend of $2 a share in three years from today and keep a 2% dividend growth rate. We know that the risk-free return is 2% and the market risk premium is 8%. Company A has a beta of 2.
A)What is the required return on Company A’s stock?
B)What is the price of Company A’s stock today?
C)What is the price of Company A’s stock in 10 years?
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Company A is not expected to pay any dividends in the following two years. It will start paying divi...
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