Joven Corp. is a young start-up company and therefore is not paying any dividends on the stock over the next 3 years. At the end of year 4, the company will pay a single $3 dividend. Then, the company will pay a $4.11 per share dividend at the end of year 5 and thereafter it will increase the dividends by 4% per year forever. If the required rate of return on this stock is 12%, what is the current (today's) share price? Show your answer to the nearest $.01. Do not use the $ or, signs in your answer.

Joven Corp. is a young start-up company and therefore is not paying any dividends on the stock over the next 3 years. At the end of year 4, the company will pay a single $3 dividend. Then, the company will pay a $4.11 per share dividend at the end of year 5 and thereafter it will increase the dividends by 4% per year forever. If the required rate of return on this stock is 12%, what is the current (today's) share price? Show your answer to the nearest $.01. Do not use the $ or, signs in your answer.

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Description: Don't give answer in image format Joven Corp. is a young start-up company and therefore is not paying any dividendson the stock over the next 3 years. At the end of year 4, the company will pay asingle $3 dividend. Then, the company will pay a $4.11

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 25P

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