Star Light & Power increases its dividend 2.2 percent per year every year. This
ID: 2639065 • Letter: S
Question
Star Light & Power increases its dividend 2.2 percent per year every year. This utility is valued using a discount rate of 9 percent, and the stock currently sells for $45 per share. If you buy a share of stock today and hold on to it for at least three years, what do you expect the value of your dividend check to be three years from today? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Star Light & Power increases its dividend 2.2 percent per year every year. This utility is valued using a discount rate of 9 percent, and the stock currently sells for $45 per share. If you buy a share of stock today and hold on to it for at least three years, what do you expect the value of your dividend check to be three years from today? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Explanation / Answer
We need to find the value of dividend three years from today, the value of the third dividend pay check.
Dividend discount model = Value of stock at T0 = Dividend per share at T1 / [Discount Rate
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.