Question
An investor has examined Home Depot stock and makes the following predictions for the future: YEAR 1 2 3 4 DIVIDEND $1.45 $1.55 $1.53 $1.55
An investor has examined Home Depot stock and makes the following predictions for the future:
| YEAR | 1 | 2 | 3 | 4 |
|---|---|---|---|---|
| DIVIDEND | $1.45 | $1.55 | $1.53 | $1.55 |
The investor believes the selling price in four years will be $71.10. If the investor wants a 14.00% return to hold the stock, what intrinsic value does the investor put on Home Depot today?
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Public Finance And Public Policy
Authors: Jonathan Gruber
7th Edition
1319281109, 9781319281106
