Gentleman Gym just paid its annual dividend of $2.5 per share, and it is widely expected that the dividend will increase by 4 percent per year indefinitely. What price should the stock sell at? Assume...



  1. Gentleman Gym just paid its annual dividend of $2.5 per share, and it is widely expected that the dividend will increase by 4 percent per year indefinitely.



  1. What price should the stock sell at? Assume the discount rate is 20 percent.

  2. How would your answer change if the discount rate were only 15 percent? Why does the answer change?



Jun 05, 2022
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