The risk$-$free rate r f is $2\mathrm{.}9\%,$ and the market return r M is $10\mathrm{.}9\%.\text{'}$s beta is $0\mathrm{.}9.$ The company's next four dividends are expected to be $$0\mathrm{.}72,$ $$0\mathrm{.}81,$ $$0\mathrm{.}9,$ and $$1\mathrm{.}00.$ The dividend growth becomes constant after $4$ years, and is estimated to be $7\mathrm{.}5\%.$ Estimate $\text{'}$s intrinsic value.

Answer rating: 100% (QA)

To estimate the intrinsic value V0 of the stock using the dividend discount model DDM for a stock th... View the full answer