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Analyze the following stock as a possible investment. It's most recent dividend was $1.95. Selena believes that the dividend will grow at the rate of 3.25% annually for the next 3 years. She is planning a huge wedding in three years and intends to sell the stock at that time. Her opportunity cost of capital is 4.5%. Be sure to show all the steps in your calculations in case Selena has any questions.

Find the expected dividends

Find the value of the stock in three years, when Selena intends to sell the stock

Find the price of the stock today, Po, using the free cash flow valuation model

Explain how to use the free cash flow valuation model. For this portion you should put your comments in a textbox.

Please show all work for solutions

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92167138

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