Pepperazzi, Inc. will not pay a dividend for three years. Four years from today, the company is expected to pay a dividend of $2.50 per share (that is, D4 = 2.50). This dividend is expected to grow at 4% per year forever. The required rate of return on Pepperazzi’s stock is 18%. The stock should sell for $____ today (that is, at t = 0).
Pepperazzi, Inc. will not pay a dividend for three years. Four years from today, the company is expected to pay
a dividend of $2.50 per share (that is, D4 = 2.50). This dividend is expected to grow at 4% per year forever. The required rate of return on Pepperazzi’s stock is 18%. The stock should sell for $____ today (that is, at t = 0).
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