Musical Chipmunks Co. just paid a dividend of $2.75 per share. The analysts’ consensus is that its dividends will be increased by 3% per year, forever. Calculate Musical Chipmunks’ dividends per share in years 1, 2 and 3. Also calculate the intrinsic value of a share of Musical Chipmunks Co. today. For this problem, assume a market capitalization rate (k) of 10%.

Answer rating: 100% (QA)

To calculate Musical Chipmunks dividends per share in years 1 2 and 3 we can use the formula for t... View the full answer