Question: I WILL UPVOTE!!! PLZ EXPLAIN THOROUGHLY AND CLEARLY! Explain by handwriting if u can write neatly and it's readable. THANKS, <3! VALUATION OF A BIOTECH

I WILL UPVOTE!!! PLZ EXPLAIN THOROUGHLY AND CLEARLY! Explain by handwriting if u can write neatly and it's readable. THANKS, <3!

VALUATION OF A BIOTECH COMPANY STOCK

  1. Enigma Biotech is one of the companies in the race to develop a vaccine for COVID-19. The results of the third stage trials are expected at the end of the year. Investors require a 10% rate of return on their investments. Last year the company paid out a dividend of $1. Calculate the stock price today making assumptions about future dividend growth that include a successful and a failed trial of the vaccine. Justify your assumptions about dividend growth.

If the probability of a successful vaccine development is 10% what will be the price of the stock today? If you bought the Enigma stock today and in a years time the company is successful in developing the vaccine calculate the rate of return you can expect based on your assumptions about dividend growth.

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