A stock is trading at $[p0] per share. The stock is expected…

A stock is trading at $[p0] per share. The stock is expected to have a year-end dividend of $[d1] per share, and it is expected to grow at some constant rate gLthroughout time. The stock’s required rate of return is [r]% (assume the market is in equilibrium with the required return equal to the expected return). What is your forecast of gL? Round your answer to two decimal places.

We covered three scenarios for estimating all future dividen…

We covered three scenarios for estimating all future dividends. One such scenario was the non-constant growth scenario. Briefly describe that scenario (i.e., what we assume about dividend growth), and state the three steps we go through to estimate the current stock price under this scenario.