Posted by **Samy** on Friday, July 30, 2010 at 5:31pm.

Thirsty Cactus Corp. just paid a dividend of $1.25 per share. The dividends are expected to grow at 28 percent for the next eight years and then level off to a 6 percent growth rate indefinitely. If the required return is 13 percent, what is the price of the stock today? (Do not include the dollar sign ($). Round your answer to 2 decimal places. (e.g., 32.16))

- Finance -
**Ms. Sue**, Friday, July 30, 2010 at 5:34pm
Christina, Erika, Rusty, Delaney, Samy -- several similar questions from the same person -- without any attempt at posting what you don't understand -- is a big turnoff for Jiskha tutors. We expect students to make an effort be and be explicit about what they don't understand.

In addition, we have no regular volunteer tutors whose expertise is finance.

- Finance -
**Alejandro**, Tuesday, January 13, 2015 at 10:00pm
1) N=8 / I%=28 / PV=1.25 therefore FV = 9.008

2) 9.008 x 1.06 = 9.54848

3) 9.54848 / (.13-.06) = 136.41

4) N=8 / I%=13 / FV= 136.41 therefore PV = 51.31

- Finance -
**Alejandro**, Thursday, January 15, 2015 at 1:48am
5) PV of Growing Annuity (From t=0 to infinity) = 18.25

6) 51.31 + 18.25 = 69.56

## Answer This Question

## Related Questions

- Finance - Marcel Co is growing quickly. Dividends are expected to grow at a 30 ...
- Finance - Universal Laser, Inc., just paid a dividend of $3.30 on its stock. ...
- Finance - MMK Cos. normally pays an annual dividend. The last such dividend paid...
- Finance - Simtek currently pays a $2.50 dividend (D0) per share. Next yearâ€™s ...
- Finance - the dividends of the reisner company are expected to grow at an annual...
- Finance - Arena Distributors is a new company and currently pays no dividends. ...
- Finance - Faulkner Corporation expects to pay an end-of-year dividend, D1, of $1...
- Finance. PLEASE HELP ME - 1) growth rates The stock price of the company is $76 ...
- Finance questions - 1) growth rates The stock price of the company is $76 ...
- strayer university - The Lo Company earned $ 2.60 per share and paid a dividend ...

More Related Questions