Question: Can someone check the D1 value and help me solve the remainder of the problems? Consider the case of Portman Industries. Portman Industries just paid
Consider the case of Portman Industries. Portman Industries just paid a dividend of $1.20 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 12.00% over the next year. After the next year, though, Portman's dividend is expected to grow at a constant rate of 2.40% per year. The risk-free rate (nr) is 3.00%, the market risk premium (RP") is 3.60%, and Portman's beta is 1.10. Term Value Dividends one year from now (D1) $1.3440 Horizon value (P1) Intrinsic value of Portman's stock Assuming that the market is in equilibrium, use the information just given to complete the table. What is the expected dividend yield for Portman's stock today? 4.76% o 4.56% 4.45% o 3.65% Portman has 1,000,000 shares outstanding, and Judy Davis, an investor, holds 15,000 shares at the current price as just found. Suppose Portman is considering issuing 125,000 new shares at a price of $25.06 per share. If the new shares are sold to outside investors, by how much will Judy's investment in Portman be diluted on a per-share basis? O $0.42 per share O $0.49 per share O $1.03 per share O $0.60 per share Thus, Judy's investment will be diluted, and Judy will experience a total loss of
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