Suppose the dividends for the Seger Corporation over the past six years were $1.

Question

Suppose the dividends for the Seger Corporation over the past six years were $1.51, $1.59, $1.68, $1.76, $1.86, and $1.91, respectively. Compute the expected share price at the end of 2014 using the perpetual growth method. Assume the market risk premium is 12.0 percent, Treasury bills yield 4.1 percent, and the projected beta of the firm is .86. (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Answer is not 19.06. Share price =
This question has enough info and can be completed. Suppose the dividends for the Seger Corporation over the past six years were $1.51, $1.59, $1.68, $1.76, $1.86, and $1.91, respectively. Compute the expected share price at the end of 2014 using the perpetual growth method. Assume the market risk premium is 12.0 percent, Treasury bills yield 4.1 percent, and the projected beta of the firm is .86. (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Answer is not 19.06. Share price =
This question has enough info and can be completed. Suppose the dividends for the Seger Corporation over the past six years were $1.51, $1.59, $1.68, $1.76, $1.86, and $1.91, respectively. Compute the expected share price at the end of 2014 using the perpetual growth method. Assume the market risk premium is 12.0 percent, Treasury bills yield 4.1 percent, and the projected beta of the firm is .86. (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Answer is not 19.06. Share price =
This question has enough info and can be completed.

Explanation / Answer

We can calculate the following as

constant growth rate=(current price*required return rate)-current annual dividends/current price+current annual dividend
So,constant growth rate 36.91%

Share price =16

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.