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Business, Finance
Year 4

Calculating the current market value of common stock given the required rate of return and future dividends and stock values.


A firm is expected to pay a cash dividend of $1.10 one year from now, $2.20 two years from now, and $4.40 three years from now.  Also, the market price of their common stock is expected to be $73 immediately following the dividend payment three years from now.  What is the approximate current market value of this firm's common stock when the required rate of return is 18%?

By OTA:  Sridhar Manyem, MBA (IP)

OTA Rating:  4.9/5

Your Price:  $2.19  (original value ~$3.99)

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