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September 3, 2015

Homework Help: Finance (common stock)

Posted by Help Please (correction) on Sunday, November 9, 2008 at 9:31am.

I need a formula for:



A share of common stock of xyz ltd is expected to pay no dividends until next 2 years but at the end of year 2 it will pay $2 as dividends. Dividends are expected to grow at 20% per annum in yrs 3 and 4 and thereafter they are expected to grow at 4% per annum into indefinite future. Assume that the required expected ROR on xyz's common stock is 14%.



Find the current price per share of the stock.

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