Tyler Inc.s most recent annual dividend was $3.55 a share. The firm has been growing at a

Question:

Tyler Inc.’s most recent annual was $3.55 a share. The firm has been growing at a consistent 4% rate for several years, but analysts generally believe better times are ahead and future growth will be in the neighborhood of 5%. The stock is currently selling for $75. similar to Tyler earn returns ranging from 8% to 10%.
a. Calculate values for a share of Tyler at interest rates of 8%, 9%, and 10%.
b. Do you think Tyler is a good investment for the long run—that is, for someone planning to hold onto it for 10 or more years?
c. Do you think it’s a good investment for the short term? That is, should you buy it with the expectation of selling in a relatively short period, say a year or less?
d. Repeat the calculations in part (a) assuming that instead of rising, Tyler’s growth rate
(1) Remains at 4%
(2) Declines to 3%.
e. Comment on the range of prices that you’ve calculated in parts (a) and (d).

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