I believe I am going to use the dividend valuation model (DVM) based on the variable-growth assumption for the ACC 345 7-1 Final Project Submission: Financial Analysis and Valuation Report. You can skim and scan through the Microsoft Word file called (3)., so you can get an idea why I want to use the dividend valuation model (DVM) based on the variable-growth assumption on the ACC 345 7-1 Final Project Submission: Financial Analysis and Valuation Report. It is because I want to find the sum of all the cash dividends that the board of directors of Verizon Communication, Inc. distributed to its shareholders between 2018 and 2020. This way, I can assess the year cash dividends paid out to stockholders at the end of 2018, 2019, and 2020 and use the total cash dividends at the end of 2018, 2019, and 2020 to find the Present value of future cash dividends for years 2018, 2019, and 2020. Then I can compute the Present value of the cash dividends (Present value of the future cash dividends, Present value of expected cash dividends, Present value of expected future cash dividends, Sum of Present Value of Cash Dividends) at the end of the variable-growth period I would get over the investment time span of the 3 years.

Eventually, I would have to determine the price of the Verizon’s stock at the end of year 3, the initial growth period, and I would have to discount the price of the Verizon stock (as computed above) back to its present value, at r (Rate of return required by the market of or on the asset (i.e., investment, security)) of ?%. Afterwards, I would have to use the Dividend Discount Model formula [(= Present value of the expected future cash dividends + Present value of the expected future selling price of the stock = Intrinsic value (price) of a security (e.g., equity security, debt security)] to calculate and find out the current, intrinsic (real) value or value of the Verizon’s stock.

Like you see below, should the "recent dividend" be the total cash dividend paid to stockholders at the end of 2017? And the future dividend, or dividends would begin in 2018, 2019, and 2020, correct?

I just want to be able to use dividend valuation model (DVM) based on the variable-growth assumption for the ACC 345 7-1 Final Project Submission: Financial Analysis and Valuation Report correctly.

What you see below is from a homework problem. I just want to follow in the example of what is in the homework problems, which contains the following pictures.

  

Transcribed Image Text:

I Buggies-Are-Us g=0 (Le.. dividends are expected to remain at $1.98/share) Gang Buster Group Year 1 Steady Freddie, Inc 9=6% (for the foreseeable future) Recent dividend Future dividend $2.23 $2.51 $2.82 $3.17 Year 2 Year 3 Year 4 Year 5 and beyond: g = 6% Projected annual-dividends: Gang Buster Group Year 1 Year 2 Year 3 Year 4 Year 5 and beyond: g = 6% Year → Year 0+ Year 1+ Year 2+ Year 3+ Year 4* + → $2.23 $2.51 $2.82 $3.17 Cash Dividends $1.98¶ $2.23 $2.51 $2.82 $3.17 Estimated annual rate of growth in cash dividends, g, for 2027-and-beyond: -6% I Buggies-Are-Us g=0 (Le.. dividends are expected to remain at $1.98/share) Gang Buster Group Year 1 Steady Freddie, Inc 9=6% (for the foreseeable future) Recent dividend Future dividend $2.23 $2.51 $2.82 $3.17 Year 2 Year 3 Year 4 Year 5 and beyond: g = 6% Projected annual-dividends: Gang Buster Group Year 1 Year 2 Year 3 Year 4 Year 5 and beyond: g = 6% Year → Year 0+ Year 1+ Year 2+ Year 3+ Year 4* + → $2.23 $2.51 $2.82 $3.17 Cash Dividends $1.98¶ $2.23 $2.51 $2.82 $3.17 Estimated annual rate of growth in cash dividends, g, for 2027-and-beyond: -6%