Current Price per Share Assignment | Homework for You
June 11th, 2020
(10 pts) 3. Robinson Inc. is a fast growing technology company. Management projects rapid growth of 20 percent for the next four years. After that, a constant-growth rate of 6 percent is expected. The firm expects to pay its first dividend of $5.00 three years from now. Dividends will grow at the same rate as the firm and the required rate of return on stocks with similar risk is 20 percent
a) Determine the current price per share.
b) If the price of the stock is currently $ 40.00, would you recommend that the stock be purchased? Explain. Get Finance homework help today