A stock just paid an annual dividend of $5.9. The dividend is expected to grow by...
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A stock just paid an annual dividend of $5.9. The dividend is expected to grow by 6% per year for the next 4 years. In 4 years, the P/E ratio is expected to be 12 and the payout ratio to be 60%. The required rate of return is 8%. Part 1 What is the intrinsic value of the stock? A stock just paid an annual dividend of $5.9. The dividend is expected to grow by 6% per year for the next 4 years. In 4 years, the P/E ratio is expected to be 12 and the payout ratio to be 60%. The required rate of return is 8%. Part 1 What is the intrinsic value of the stock?
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Step 1 Calculate future dividends for the next 4 years We can use the dividend growth rate to estima... View the full answer
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
Posted Date:
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