Respuesta :
Answer:
The projected dividend for the coming year is 2.15
Explanation:
let D be next year dividend
D2 = D × 1.3 = 1.3D
D3 = D × 1.3^2 = 1.69D
D4 = D × 1.3^2 × 1.2
= 2.028D
Dividends are expected to grow:
during the next three years, g1 = 30%
over the following year, g2 = 20%
then per year indefinitely, g3 = 5%
Required return on this stock, rr = 11%
[tex]Price\ at\ year\ 4=D\times(1+g1)^{2}\times(1+g2)\times\frac{(1+g3)}{rr-g3}[/tex]
[tex]Price\ at\ year\ 4=D\times(1.3)^{2}\times1.2\times\frac{1.05}{0.11-0.05}[/tex]
= 35.49D
current price = 60
[tex]\frac{D}{(1+rr)}+ \frac{D2}{(1+rr)^{2}}+\frac{D3}{(1+rr)^{3}}+\frac{D4}{(1+rr)^{4}}+\frac{P4}{(1+rr)^{4}}=60[/tex]
[tex]\frac{D}{(1.11)}+ \frac{1.3D}{(1.11)^{2}}+\frac{1.69D}{(1.11)^{3}}+\frac{2.028D}{(1.11)^{4}}+\frac{35.49}{(1.11)^{4}}=60[/tex]
D = 2.15
Therefore, the projected dividend for the coming year is 2.15
