A10. (Dividend Discount Model)
Corporate Financial Management (3rd Edition)
Emery, Douglas R., Finnerty, John D., & Stowe, John D. (2007)
Individual assignment: Text Problem Set
Chapter 5, Problems
A10. (Dividend Discount Model) Assume RHM is expected to pay a total cash dividen of $5.60 next year and its dividends are expected to grow at a rate of 6% per year forever. Assuming annual dividend payments. What is the current market value of a share of RHM stock if the required return on RHM common stock is 10%?
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