Problem 7-17 Nonconstant Dividends [LO 1]

Question

Apocalyptica Corporation is expected to pay the following dividends over the next four years: $5.10, $16.10, $21.10, and $2.90. Afterwards, the company pledges to maintain a constant 5.25 percent growth rate in dividends, forever.

Required:
If the required return on the stock is 7 percent, what is the current share price? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
290*(1.0525)/(.7-.0525)

Answer 1

bc