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jenny yehudai jenny yehudai
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A year ago
Rentz RVs Inc. (RRV) is currently enjoying relatively high growth because of a surge in the demand for recreational vehicles. Management expects earnings and dividends to grow at a rate of 28% for the next 4 years, after which higher gas prices will probably reduce the growth rate in earnings and dividends to zero; that is, g = 0. The company’s last dividend, D0, was $1.50. RRV’s beta is 1.3, the market risk premium is 6%, and the risk-free rate is 4.5%. What is the current price of the common stock?


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$28.00



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$28.35



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$28.71



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$29.00

Textbook 
Financial Management: Theory and Practice

Financial Management: Theory and Practice


Edition: 4th
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Quins184Quins184
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