3. You have been asked to calculate the dividend discount model-based price per share for the...

  

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3. You have been asked to calculate the dividend discount model-based price per share for the three airlines shown above. You know the following for 2019: Firm Eastern Dividend 3.05 Western Northern 2.00 2.20 Growth/year 3.1% 2.0% 2.7% You already know their WACCS, so you can use them to present value the stream of dividends. Remember that the terminal value uses the perpetuity formula and that it automatically shows the value as of the beginning of the year when it is calculated! 1 2 3 Eastern 4 Western 5 Northern 6 7 8 9 Eastern A B 2019 Dividends Dividends Growth/yr. Dividend Stream 2020 10 Western 11 Northern 12 13 14 15 Eastern 16 Western 17 Northern 18 19 20 DDM Value of each Firm S/share 21 22 23 D E F G 2021 TV 3. You have been asked to calculate the dividend discount model-based price per share for the three airlines shown above. You know the following for 2019: Firm Eastern Dividend 3.05 Western Northern 2.00 2.20 Growth/year 3.1% 2.0% 2.7% You already know their WACCS, so you can use them to present value the stream of dividends. Remember that the terminal value uses the perpetuity formula and that it automatically shows the value as of the beginning of the year when it is calculated! 1 2 3 Eastern 4 Western 5 Northern 6 7 8 9 Eastern A B 2019 Dividends Dividends Growth/yr. Dividend Stream 2020 10 Western 11 Northern 12 13 14 15 Eastern 16 Western 17 Northern 18 19 20 DDM Value of each Firm S/share 21 22 23 D E F G 2021 TV

Answer rating: 100% (QA)

Firm Dividend 2019 Eastern 200 Western 150 Northern Eastern 120 Growth per year WACC 200 5851 ... View the full answer