Stony Brook Corp. recently paid an annual $15 per share dividend. From the recently approved patent,...

 

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Stony Brook Corp. recently paid an annual $15 per share dividend. From the recently approved patent, this company's net profits will grow at 20% in the next 2 years, and at 5% in the third year and beyond due to the expiration of the patent. The required return to this company's shareholders is at 10%. (1) Calculate the Horizon Value at T=2 of Stony Brook's stock per share. (3 points) Stony Brook Corp. recently paid an annual $15 per share dividend. From the recently approved patent, this company's net profits will grow at 20% in the next 2 years, and at 5% in the third year and beyond due to the expiration of the patent. The required return to this company's shareholders is at 10%. (1) Calculate the Horizon Value at T=2 of Stony Brook's stock per share. (3 points)

Answer rating: 100% (QA)

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