标题: Practice Question - stock valuation [打印本页] 作者: cyber21 时间: 2011-7-11 15:12 标题: Practice Question - stock valuation
Another question that I probably wouldn't have a problem understanding if I could think straight:
S Inc has just decalard a div of $ per hare. divs are expected to grow at 5% for the next 5 years. At the end of the fifth year, the stock will be sold for $40. if required returns are 10%, calculate the current price.
Ok, so I know how to solve this problem, but I'm getting the wrong value for the PV of the CFs. I'm getting $26.73 (1.91, 1.21, 1.74, 1.66, 20.21), but it's actually 27.34.
Am I discounting too many periods?作者: shootingstar 时间: 2011-7-11 15:12
how much is "$ per hare"?
CP作者: Siddimaula 时间: 2011-7-11 15:12
Ha sorry...$2. Also, another mistake - the stock will be sold for $30 (not $40). I need sleep.
