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An analyst is trying to determine the value of ABC Company using multistage DDM where he assigned 7% to be the appropriate discount rate. The
An analyst is trying to determine the value of ABC Company using multistage DDM where he assigned 7% to be the appropriate discount rate. The analyst believes that the company is going to experience a supernormal growth for the next 3 years where growth rate is going to be 12% in each year. After 3 years, the growth rate is going to decline linearly from 12% to 4% over a period of 8 years after which the growth rate will remain at 4%. If the companys current dividend per share (DPS) is $8.70, estimate the value using DDM.
What is the Dividend Per Share for Year 3? |
What is the Dividend Per Share for Year 1? |
What is the Dividend Per Share for Year 2? |
What is the Intrinsic Value? |
What is the terminal value? |
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