xodiana
Jul 2, 2008, 08:47 PM
Miller Juice is a young company that currently does not pay a dividend. The company retains all their earnings to finance their growth. However, ten years from now the company is expected to start paying a $1.50 dividend. According to research reports the dividend should then grow by 5% annually forever.
If the required return on the stock investment is 13%, what should be Miller's stock price today?
If the required return on the stock investment is 13%, what should be Miller's stock price today?