Synovec Company just paid a dividend of $1.75 per share and expects dividends to grow 24% for the next 3 years and then 5% thereafter; given a required return of 14%, the current share price is $12.50.
Synovec Company is growing quickly Dividends are expected t.pdf
1. Synovec Company is growing quickly. Dividends are expected to grow at a rate of 24 percent for
the next three years, with the growth rate falling off to a constant 5 percent thereafter. If the
required return is 14 percent, and the company just paid a dividend of $1.75, what is the current
share price? (Do not round intermediate calculations and round your answer to 2 decimal places,
e.g., 32.16.)