Question: 17 (32 points) Doc Inc.'s dividends per share are currently $3. Stocks with similar risk are currently priced to provide a 14% required rate of

17 (32 points) Doc Inc.'s dividends per share are currently $3.

17 (32 points) Doc Inc.'s dividends per share are currently $3. Stocks with similar risk are currently priced to provide a 14% required rate of return. The earnings and dividend growth prospects of the company are disputed by two analysts. 1. Charlie is forecasting a 5% per year forever. 32 noints 2. Lucy is predicting a 15% growth in dividends, but only for the next two years, after which the growth rate is expected to slow to 3% forever. 01:22:56 a. What is the intrinsic value of Doc's stock according to Charlie? Keep two decimal places and show your work. (10 points) Pg=$ according to Charlie. b. If the current market price for Doc Inc. is $33 per share, based on your calculation in part a, is it is undervalued or overvalued? List one trading strategy based on your over / under-valuation decision. (7 points) The stock is currently My trading strategy is c. What is the intrinsic value of Doc's stock according to Lucy? Keep two decimal places and show your work. (15 points) 17 (32 points) Doc Inc.'s dividends per share are currently $3. Stocks with similar risk are currently priced to provide a 14% required rate of return. The earnings and dividend growth prospects of the company are disputed by two analysts. 1. Charlie is forecasting a 5% per year forever. 32 noints 2. Lucy is predicting a 15% growth in dividends, but only for the next two years, after which the growth rate is expected to slow to 3% forever. 01:22:56 a. What is the intrinsic value of Doc's stock according to Charlie? Keep two decimal places and show your work. (10 points) Pg=$ according to Charlie. b. If the current market price for Doc Inc. is $33 per share, based on your calculation in part a, is it is undervalued or overvalued? List one trading strategy based on your over / under-valuation decision. (7 points) The stock is currently My trading strategy is c. What is the intrinsic value of Doc's stock according to Lucy? Keep two decimal places and show your work. (15 points)

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