Solving for a stock’s present value with 3-Part DDM
Onitsuka Tiger (オニツカタイガー) just paid a dividend of $3.50 on its stock. The growth rate in dividends is expected to be a constant 5 percent per year indefinitely. Investors require a 14 percent return on the stock for the first three years. A 12 percent return for the next three years, and a 10 percent return thereafter. What is the current share price?