Assume that Temp Force is a constant growth company whose last dividend (D0, which was paid yesterday)

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Assume that Temp Force is a constant growth company whose last dividend (D0, which was paid yesterday) was $2.00 and whose dividend is expected to grow indefinitely at a 6% rate.

 (1) What is the firm’s expected dividend stream over the next 3 years?
 (2) What is the firm’s current intrinsic stock price?
 (3) What is the stock’s expected value 1 year from now?
 (4) What are the expected dividend yield, the expected capital gains yield, and the expected total return during the first year?

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Corporate Finance A Focused Approach

ISBN: 978-1439078082

4th Edition

Authors: Michael C. Ehrhardt, Eugene F. Brigham

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