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Answer has been provided in grey cells, but please show me how to get this answer via EXCEL formula NOT fin. calc. two-stage variable growth
Answer has been provided in grey cells, but please show me how to get this answer via EXCEL formula NOT fin. calc.
two-stage variable growth model to estimate the value of common stock. The most recent annual dividend paid was $4 per share. analysts expect dividends to increase 7% per year for the next 3 years and then drop to 3% starting in year 4 and remain at that rate for the foreseable future. The required rate of return used for the analysis is 8% a) What are the expected dividends for the next 4 years? b) What is the value of the stock attributable to the first 3 years of dividends? (use NPV function) c) What is the value of the stock at the end of year 3 ? (use constant-growth model) d) What is the value of the stock attributable to years 4 and beyond? (use pv function, where answer to part C is the fv) e) What is the total value of stockStep by Step Solution
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