Non-constant growth: BioSciTech Ltd a biotech company has forecast the following growth rates for the next three years: 30 percent, 25 percent, and 20 percent. The company then expects to grow at a constant rate of 7 percent for the next several years. The company paid a dividend of $2.00 last week. If the required rate of return is 16 percent, what is the market value of this share?
A) $51.03
B) $36.87
C) $56.12
D) $46.37

Question

Quizplus · Accepted Answer

The Answer of Non-constant growth: BioSciTech Ltd a biotech company has forecast the following growth rates for the next three years: 30 percent, 25 percent, and 20 percent. The company then expects to grow at a constant rate of 7 percent for the next several years. The company paid a dividend of $2.00 last week. If the required rate of return is 16 percent, what is the market value of this share?
A) $51.03
B) $36.87
C) $56.12
D) $46.37

Non-Constant Growth: BioSciTech Ltd a Biotech Company Has Forecast the Following