sonia asked in Business & FinanceInvesting · 1 decade ago

The Starr Co. just paid a dividend of $1.50 per share on its stock.?

The dividends are expected to grow at a constant rate of 8% per year. If investors require a 13% return on the stock, what is the current price? what will be the price in three years and 15 years?

1 Answer

  • 1 decade ago
    Favorite Answer

    current price $30 if the $1.50 was a annual dividend, but most companies pay dividends quarterly

    in three years dividend would be $1.89, stock price would be $37.79

    15 years would tire me out, hope this helps

    use a constant growth dividend valuation model.

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