Hart Enterprises recently paid a dividend, D0, of $1.25. It expects to have non-constant growth of 20%

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Hart Enterprises recently paid a dividend, D0, of $1.25. It expects to have non-constant growth of 20% for 2 years followed by a constant rate of 5% thereafter. The firm’s required return is 10%.

a. How far away is the terminal, or horizon, date?

b. What is the firm’s horizon, or terminal, value?

c. What is the firm’s intrinsic value today, P0?

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Fundamentals of Financial Management

ISBN: 978-0324664553

Concise 6th Edition

Authors: Eugene F. Brigham, Joel F. Houston

Question Posted: Oct 05, 2011 08:02 AM

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Hart Enterprises recently paid a dividend, D0, of $1.25. It expects to have non-constant growth of 20%

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a The terminal or horizon date is the date when the growth rate ...View the full answer

Fundamentals of Financial Management

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