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Question Crazee Enterprises Corporation just paid a dividend and it expects that dividend to grow by 10 percent for the next three years. After that, the dividend is expected to grow at a constant rate of 5 percent in perpetuity. If the company’s stock is currently selling for $72 per share and the required return is 10 percent, what is the amount of the NEXT dividend, i.e., D1?

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Question

Crazee Enterprises Corporation just paid a dividend and it expects that dividend to grow by 10 percent for the

next three years.  After that, the dividend is expected to grow at a constant rate of 5 percent in perpetuity.  If the company’s stock is currently selling for $72 per share and the required return is 10 percent, what is the amount of the NEXT dividend, i.e., D1?

 
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