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4. Stock valuation. You have made the following forecasts about the dividends of XYZ inc. For the next four years the following dividends are
4. Stock valuation. You have made the following forecasts about the dividends of XYZ inc. For the next four years the following dividends are expected from XYZ-4 EUR, 6 EUR, 6 EUR and 7 EUR respectively. After the four years, the dividends are expected to continue growing by 4% forever. The required return investor would normally expect from similar companies is 12%. Questions: a) Find the value of the stock b) If the current stock price is 68 euros, would you recommend buying this stock? Why?
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a To find the value of the stock we can use the dividend discount model DDM The DDM calculates the present value of all future dividends to determine ...
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
