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Can’t co has a cost of equity of 10% and has forecast its future dividends as follows
Current yr: no div
Year1: no div
Year 2: $0.25 per share
Year 3:$0.50 per share and increasing by 3% per year in subsequent years.
What is the current share price of Can’t Co using the dividend valuation model?There is no point in simply setting me a test question and expecting an answer!!
You must have an answer in the same book in which you found the question and so you should ask about whatever it is in the answer that you are not clear about – then I will help you.
Also, do watch my free lectures because I work through examples just like this one and explain what is happening, and why – you cannot expect me to type out all of my lectures here 🙂
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