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Problem:

Portman industries just paid a dividend of $2.40 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 12.00% over the next year. After the next year, though, Portman's dividend is expected to grow at a constant rate of 2.40% per year.

The risk free rate is 3.00%, the market risk premium is 3.60% and pormans beta is 1.90.

Assuming that the market is in equilibrium

Question 1: What are the dividends one year from now________?

Question 2: What is the Horizon Value__________?

Question 3: What is the intrinsic value of Portman's stock_______?

Question 4: What is the expected dividend yield for portmant stock today?

A. 5.95%

B. 7.44%

C. 7.26% 3

D. 7.98%

Explain in detail and provide all calculation and formulas.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91147009

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