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18. CX Enterprises has the following expected dividends: \$1 in one year, \$1.15 in two years, and \$1.25 in three years. After that, its dividends are...

This question was created from 1292018402_Fundamentals_Part2-3 https://www.coursehero.com/file/21058528/1292018402-Fundamentals-Part2-3/

18. CX Enterprises has the following expected dividends: \$1 in one year, \$1.15 in two
years, and \$1.25 in three years. After that, its dividends are expected to grow at
4% per year forever (so that year 4’s dividend will be 4% more than \$1.25 and so on).
If CX's equity cost of capital is 12%, what is the current price of its stock?

• what if the percentage changed and it is 11% r and 3% g how would it change
• mageban
• Jun 02, 2018 at 1:45pm
• and dividend is 8%
• mageban
• Jun 02, 2018 at 1:46pm
• yes, all calculations will change as there will be a change in discount rate and dividend growth rate
• payaljain3
• Jun 02, 2018 at 1:49pm
• can you confirm if the answer will be 35 just wanna make sure if i am doing it correctly
• mageban
• Jun 02, 2018 at 1:51pm
• CX Enterprises has the following expected​ dividends: ​\$1 in one​ year, ​\$1.13 in 2​ years, and ​\$1.20 in 3 years. After​ that, its dividends are expected to grow at 5​% per year forever​ (so that year​ 4's dividend will be 5​% more than ​\$1.20 and so​ on). If​ CX's equity cost of capital is 13​%, what is the current price of its​ stock?
• mageban
• Jun 02, 2018 at 1:53pm
• how would i solve this i am not getting a correct answer
• mageban
• Jun 02, 2018 at 1:53pm
• I request you to post it as a separate question
• payaljain3
• Jun 02, 2018 at 1:58pm
• posted it
• mageban
• Jun 02, 2018 at 2:03pm

The current price... View the full answer

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