Zeta Corporation Stock Valuation Calculation
Zeta Corporation Stock Valuation Calculation
Zeta Corporation just paid a $2.00 dividend. Analysts believe that Zeta Corporation’s dividend will grow by 20% next year, and then settle into a constant growth regime at 5% per year into the future. If investors assign a required rate of return of 12% to Zeta’s stock, what should the stock sell for today?
I guess the correct answer is $32.14
Zeta Corporation just paid a $2.00 dividend. Analysts believe that Zeta Corporation’s dividend will grow by 20% next year, and then settle into a constant growth regime at 5% per year into the future. If investors assign a required rate of return of 12% to Zeta’s stock, the stock sell for today is $32.14.
What factors determine the stock valuation of Zeta Corporation? Factors such as dividend growth rate, required rate of return from investors, and the expected future growth rates play a crucial role in determining the stock valuation of Zeta Corporation.