Holt Enterprises recently paid a dividend, D₀, of $2.50. It expects to have nonconstant growth of 25% for 2 years followed by a constant rate of 7% thereafter. The firm's required return is 16%.

1. What is the firm's horizon, or continuing, value? Do not round intermediate calculations. Round your answer to the nearest cent.

1. What is the firm's intrinsic value today, ? Do not round intermediate calculations. Round your answer to the nearest cent.

Answer rating: 100% (QA)

To find the firms horizon or continuing value we need to calculate the dividend at year 3 and then a... View the full answer