FIN 230 – Southern Foods just paid an annual dividend of $1.10 a share.
January 8th, 2018
Southern Foods just paid an annual dividend of $1.10 a share. Management estimates the dividend will increase by 9 percent a year for the next four years. After that, the annual dividend growth rate is estimated at 3.5 percent. The required rate of return is 14 percent. What is the value of this stock today?