Question: Now assume that Temp Forces dividend is expected to experience super normal growth of 30% from Year 0 to Year 1, 20% from Year 1

Now assume that Temp Force’s dividend is expected to experience super normal growth of 30% from Year 0 to Year 1, 20% from Year 1 to Year 2, and 10% from Year 2 to Year 3. After Year 3, dividends will grow at a constant rate of 6%. What is the stock’s intrinsic value under these conditions? What are the expected dividend yield and capital gains yield during the first year? What are the estimated dividend yield and capital gains yield during the fourth year?

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