The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 16 percent a year for the next 4 years and then decreasing the growth rate to 6 percent per year. The company just paid its annual dividend in the amount of $1.60 per share. What is the current value of one share of this stock if the required rate of return is 7.10 percent

$287.01

Explanation:

The 2 stage dividend discount model would be used to determine the current value of the stock.

first stage

Present value in year 1 = (1.6 x 1.16) / 1.071 = 1.73

Present value in year 2 = (1.6 x 1.16²) / 1.071² = 1.88

Present value in year 3 = (1.6 x 1.16³) / 1.071³ =2.03

Present value in year 4 = (1.6 x 1.16^4) / 1.071^4 = 2.20

second stage

[ (1.6 x 1.16^4) x (1.06) ] / (0.071 - 0.06) = 279.17

Value of the stock = 1.73 + 1.88 + 2.03 + 2.20 + 279.17 = $287.01

answer; /// i believe the correct answer is first in, first out(fifo); //

the u.s. census bureau produces data on the population and economy nationwide. it can you to analyze the kind of people living in your neighborhood. it does not show you the market of people willing to buy your product or an existing market for your product. that will require more market research. the census bureau only gives you an insight to the demographics in your area.