Nonconstant growth stockdo 240dividend growth rate is 20, Ask an Expert

Finance

Nonconstant growth stock

Do= $2.40

Dividend growth rate is 20% for year 1, then after year one is constant at 4.0%

Risk free rate = 5.0%

Market risk premium = 6.0%

Beta= 1.5

Assuming market is in equilibrium

Questions:

What is the dividend one year from now, (D1)?

Horizon Value (P1)?

Intrinsic value of stock?

What is the expected dividend yield for the stock today?

View complete question

Financial Management, Finance

Category:- Financial Management
Reference No.:- M92750344

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