FINANCE 2310- Sam Adams is experiencing a variable growth period.
Sam Adams is experiencing a variable growth period. In the first five years dividends will experience a 25% growth rate. After the fifth year they expect the growth to stabilize to 8% per year indefinitely. The discount rate for Sam Adams is 14%, the last dividend paid by Sam Adams (D0) was $ 1.50. As a financial analyst, calculate the price of Sam Adams’ stock today (P0) and the Price in the second year (P2). Also calculate the dividends yields and capital gains yields for today and years 2 and 5.
