Question
*** BOTH QUESTIONS NEED TO BE ANSWERED IN EXCEL FORMULA FORMAT*** 2. you plan to buy bulldog corportation stock. you predict that bulldog will pay
*** BOTH QUESTIONS NEED TO BE ANSWERED IN EXCEL FORMULA FORMAT***
2. you plan to buy bulldog corportation stock. you predict that bulldog will pay dividends of $2 in year 1 and $3 in year 2, respectively. you are also confident that you can sell the stock for $100 per share at the end of year 2. if you require a 10 percent return on sock, what is its fair price from your perspective?
PV DIV=
PV PRICE=
INTRINSIC VALUE=
3. company BMI will experience a supernatural growth rate of 20% in the next two years. the growth rate will then level off to 5% from year 3 and beyond. the most recent dividend payment was $2.00 and the requaired rate of return for XYZ stock is 10%. what is the intrinsic value of BMI stock?
D1=
D2=
P2=
PV(D1+D2)=
PV(P2)=
INTRINSIC VALUE=
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