FFG Industrials just paid a dividend of $3.00. Given the high demand in its industry, dividends...

 

Transcribed Image Text:

FFG Industrials just paid a dividend of $3.00. Given the high demand in its industry, dividends are projected to increase 15% in the next year and 12% in the following year. After thak, dividends are projected to grow at a constant rate of 4% indefinitely. The market desires a return of 8.5%, given the risk in this industry. Your analysis shows that the stock should sell at a price of $1 Select] today. The stock is currently trading at $85. You would recommend that the portfolio manager [Select] stock. the current holding given your strong conviction in your analysis to value the FFG Industrials just paid a dividend of $3.00. Given the high demand in its industry, dividends are projected to increase 15% in the next year and 12% in the following year. After thak, dividends are projected to grow at a constant rate of 4% indefinitely. The market desires a return of 8.5%, given the risk in this industry. Your analysis shows that the stock should sell at a price of $1 Select] today. The stock is currently trading at $85. You would recommend that the portfolio manager [Select] stock. the current holding given your strong conviction in your analysis to value the

Answer rating: 100% (QA)

To determine the appropriate recommendation we need to compare the intrinsic value of the stock wit... View the full answer