*** 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=