A stock just paid a dividend this morning of $1.45. Dividends are expected to grow at 12.00% for the next two years. After year 2, dividends are expected to grow at 7.88% for the following three years. At that point, dividends are expected to grow at a rate of 4.00% forever.

If investors require a return of 13.00% to own the stock, what is its intrinsic value?

Answer rating: 100% (QA)

To calculate the intrinsic value of the stock we need to find the present value of all future cash f... View the full answer