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Can anyone help me with this problem! Im having some trouble with it......Please :) I will need it before 12am Suppose the company is facing
Can anyone help me with this problem! Im having some trouble with it......Please :) I will need it before 12am
Suppose the company is facing a fast growth of 22% per yaer for the next 4 years. After that the growth becomes constant Company's beta is 1.2; market risk premium is 5.5% and risk-free rate is 3%. Last dividend (Do) is $1.25 per shar Find: a. Find required rate of return; b. Horizon stock price at time 4; c. Intrinsic stock value today. a. Required return = rS = rRF + b(RPM) = Year Dividend b. Horizon value = D5/(rs g 5) = c. Total CFs PV of the CFs Price = Sum of PVs 0 1 2 3 4 5 t 0%. reStep by Step Solution
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