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A firm is expected to make four dividend payments of 1.40. Then dividends are expected to stop for 7 periods. At that point, the stock
A firm is expected to make four dividend payments of 1.40. Then dividends are expected to stop for 7 periods. At that point, the stock has a forecasted EPsS of $7.60 and a PE ratio of 23.2. If the required return of the stock is 15%, what is its intrinsic value?
According to my professor, the answer should be $37.03. However, I do not see how he got that answer.
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