1.Pharoah, Inc., management expects to pay no dividends for the next six years. It has projected a...
Question:
1.Pharoah, Inc., management expects to pay no dividends for the next six years. It has projected a growth rate of 25 percent for the next seven years. After seven years, the firm will grow at a constant rate of 5 percent. Its first dividend, to be paid in year 7, will be $3.62. If the required rate of return is17percent, what is the stock worth today?(Round intermediate calculations and final answer to 2 decimal places, e.g. 15.20.)
2.CullumberCorp. is expected to grow rapidly at a rate of 35 percent for the next seven years. The company's first dividend, to be paid three years from now, will be $5. After seven years, the company (and the dividends it pays) will grow at a rate of8.9percent. What is the value ofCullumberstock with a required rate of return of 14 percent?(Round intermediate calculations and final answer to 2 decimal places, e.g. 15.20.)