Question

Can anyone help me please?

Answer 1

Thirsty Cactus Corp. just paid a dividend of $1.20 per share. The dividends are expected to grow at 35 percent for the next 8 years and then level off to a 6 percent growth rate indefinitely.

Required :
If the required return is 13 percent, what is the price of the stock today?

Answer 2

\[d1=1.20(1+0.35)\div1.13^{1}\]
\[d2=d1(1.035)\div(1.13)^{2}\]
.
.
.d8\[=d7(1.035)\div(1.13)^{8}\]
last cumulative dividend will be
dn=\[d8\div(0.06-0.35)\]

Answer 3

now all these dividends to get the price of stock today

Answer 4

in d2 and d7 i have written 1.035...sorry i wroye it by mistake ..it will be 1.35