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B C D You have gathered the following financial data for the BBC Company. The following dividends are expected over the next five years. Management
B | C | D |
You have gathered the following financial data for the BBC Company. | ||
The following dividends are expected over the next five years. | ||
Management expects the price in year 5 to be | $34.89 | |
Management expects thefollwing future dividends. | ||
Year | Dividends | |
1 | $4.35 | |
2 | ||
3 | $5.32 | |
4 | ||
5 | $5.23 | |
Firms in the same risk class have growth rates of | 4.00% | |
The expected rate of return over the next five years is | 11.50% | |
What is the approximate intrinsic value of the BBC stock today? | ||
a. | Approximate Intrinsic Value of BBC = $31.02 | |
b. | Approximate Intrinsic Value of BBC = $13.02 | |
c. | Approximate Intrinsic Value of BBC = $29.78 | |
d. | Approximate Intrinsic Value of BBC = $32.05 |
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