Dividend Discount Model Question
Brandy Clark, CFA, has forecast that Aceler, In. will pay its first dividend two years from now in the amount of $1.25. For the following year she forecasts a dividend of $2.00 and expects dividends, to increase at an average rate of 7% for the foreseeable future after that. If the risk-free rate is 4.5%, the market risk premium is 7.5%, and Aceler's beta is 0.9, Clark would estimate the current value of Aceler shares as being cloest to:
A. $37
B. $39
C. $47 |