Question
Assume that D 0 = $2, the dividend is expected to grow at 10% for the first year and at 6% for the second year,
Assume that D0 = $2, the dividend is expected to grow at 10% for the first year and at 6% for the second year, and then it will grow at a constant rate of 4% after the second year. Also, the RRR of this stock is 10%
a)Estimate the horizon value (P2) of this stock by using the constant dividend growth model.
b)Estimate the present value of this stock by using the supernormal (nonconstant) growth model.
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Technical Analysis The Complete Resource for Financial Market Technicians
Authors: Charles D. Kirkpatrick, Julie R. Dahlquist
1st edition
134137043, 134137049, 978-0131531130
