Melissa Cutt is thinking about buying some shares of EZLawn Equipment, at $46.23 per share. She...
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Melissa Cutt is thinking about buying some shares of EZLawn Equipment, at $46.23 per share. She expects the price of the stock to rise to $57.67 over the next 3 years. During that time she also expects to receive annual dividends of $5.71 per share. a. What is the intrinsic worth of this stock, given a required rate of return of 11%? b. What is its expected return? a. The intrinsic worth of this stock is $ 56.12. (Round to the nearest cent.) b. The expected return is%. (Round to one decimal place.) Melissa Cutt is thinking about buying some shares of EZLawn Equipment, at $46.23 per share. She expects the price of the stock to rise to $57.67 over the next 3 years. During that time she also expects to receive annual dividends of $5.71 per share. a. What is the intrinsic worth of this stock, given a required rate of return of 11%? b. What is its expected return? a. The intrinsic worth of this stock is $ 56.12. (Round to the nearest cent.) b. The expected return is%. (Round to one decimal place.)
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Answer rating: 100% (QA)
To calculate the intrinsic value of the stock we can use the dividend discount model DDM ... View the full answer
Related Book For
Fundamentals of Investing
ISBN: 978-0133075359
12th edition
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
Posted Date:
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