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3) In the problem above (question 2); let us assume that investors rather than predicting one growh rate of 15%; predict two different growh rates.

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3) In the problem above (question 2); let us assume that investors rather than predicting one growh rate of 15%; predict two different growh rates. It is estimated that the dividends will grow at the rate of 10% in the next three years. Then the growth rate of dividends will accelerate to 20% starting in the fourth year and that growth rate will continue forever in the rest of future years, Given this: how the fundamental price of that stock changes ? (use the values of Question 2 in the answer. Only the growth rate is different in this question) b) Is that stock a good buy at the price of 12.4 per share with that new fundamental price? 2) a) The following information is given. The expected rate of return of the index in next year is 30%, current annual rate of return of T-Bills is %15. We consider a stock whose beta is 1.2. It is estimated that this firm will pay a dividend per share of 2 TL next year. Investors predict that dividends will grow at the constant rate of 15% in future years. Then what may be the fundamental price of that stock? b) Will you consider to buy that stock if its current market value is 12.4 TL per share? 3) In the problem above (question 2); let us assume that investors rather than predicting one growh rate of 15%; predict two different growh rates. It is estimated that the dividends will grow at the rate of 10% in the next three years. Then the growth rate of dividends will accelerate to 20% starting in the fourth year and that growth rate will continue forever in the rest of future years. Given this: how the fundamental price of that stock changes ? (use the values of Question 2 in the answer. Only the growth rate is different in this question) b) Is that stock a good buy at the price of 12.4 per share with that new fundamental price

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