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17 October, 04:00

Frey Corp. is experiencing rapid growth. Dividends are expected to grow at 25 percent per year during the next three years, 18 percent over the following year, and then 8 percent per year, indefinitely. The required return on this stock is 15 percent, and the stock currently sells for $60.00 per share. What is the projected dividend for the coming year?

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  1. 17 October, 07:21
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    Projected dividend is 15.

    Explanation:

    In order to calculate projected annual dividend for the coming year, we simply multiply stock price with projected dividend growth rate and we get dividend for the coming year equal to 15.
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