Nu-Tech stock's last annual dividend was $1.10 a share.Dividends are expected to increase by 15 percent for the next 2 years and then increase at a constant 3 percent annually.The required return is 17.5 percent.What is the current value per share?

Question

Quizplus · Accepted Answer

P₂ = ($1.10 × 1.15² × 1.03)/ (0.175 − 0.03)= $10.33 P₀ = ($1.10 × 1.15)/ 1.175 + [($1.10 × 1.15²)+ $10.33] / 1.175² = $9.62

Nu-Tech Stock's Last Annual Dividend Was $1