Question: please help with expected dividends present value? and is future value done right? Attempts Keep the Highest: 78 ttention: Due to a bug in Google
Attempts Keep the Highest: 78 ttention: Due to a bug in Google Chrome, this page may not function correctly. Click here to learn more. 4. Expected dividends as a basis for stock values The following graph shows the value of a stock's dividends over time. The stock's current dividend is $1.00 per share, and dividends are expected to grow at a constant rate of 2.70% per year. The intrinsic value of a stock should equal the sum of the present value (PV) of all of the dividends that a stock is supposed to pay in the future, but many people find it difficult to imagine adding up an infinite number of dividends Calculate the present value (PV) of the dividend paid today (De) and the discounted value of the dividends expected to be paid 10 and 20 years from now (Due and Dzo). Assume that the stock's required return (rs) is 8.40% Note: Camy and round the calculations to four decimal places. Time Period Now Dividend's Expected Expected Dividend's Future Value Present Value $1.0000 $1.3053 $0.8504 $1.7038 $0.3992 $3.7890 $0.0672 End of Year 10 End of Year 20 End of Year 50 Using the red curve (cross symbols), plot the present value of each of the expected future dividends for years 10, 20, and 50. The resulting curve will illustrate how the PV of a particular dividend payment will decrease depending on how far from today the dividend is expected to be received. plotting it Note: Round each of the discounted values of the of dividends to the nearest tenth decimal place on the graph. You can mouse over the points in the graph to see their coordinates DIVIDENDS ISI 5.00 Discounted Dividends 4.00 FV of Dividends 2.00 2.00 1.00 PV of Ovidends 0.00 9 10 20 30 50 YEARS fear
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