Agarwal Technologies was founded 10 years ago. It has been profitable for the last 5 years, but it has needed all of its earnings to support growth and thus has never paid a dividend. Management has indicated that it plans to pay a $0.25 dividend 3 years from today, then to increase it at a relatively rapid rate for 2 years, and then to increase it at a constant rate of 8.00% thereafter. Managements forecast of the future dividend stream, along with the forecasted growth rates, is shown below. Assuming a required return of 11.00%, what is your estimate of the stocks current value? 0 1 2 3 4 5 6 Growth rate NA NA NA NA 50% 25% 8% Dividends $0.000 $0.000 $0.000 $0.250 $0.375 $0.469 $0.506 $9.94 $10.19 $10.45 $10.72 $10.99
Use the order calculator below and get started! Contact our live support team for any assistance or inquiry.
[order_calculator]