Suppose now that stocks in the XYZ Boat Company are available. These stocks are expected to pay a dividend of $$7\mathrm{.}00$ per share next year. Thereafter, dividend growth is expected to be $5$ percent a year forever. Are these securities more valuable than those of the ABC Boat Company? Show your work. $($assume $10\%$ discount rate$)$

What portion of the values XYZ calculated in part $($b$)$ is attributed to the present value of growth opportunities? Assume year one earnings per share $($EPS$)$ for the XYZ Corp will be $$10$:$00.$ Show your work.  

Answer rating: 100% (QA)

Calculate the dividends for years 1 to infinity Dividend in year 1 700 Dividend growth rate 5 Theref... View the full answer