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can you please do all of the parts Use the vanable-growth model to predict the intrinsic value of the Rhyhom Company common stock. Assume that
can you please do all of the parts
Use the vanable-growth model to predict the intrinsic value of the Rhyhom Company common stock. Assume that dividends will grow at a vaciable rase for the next three years i2019. 2020, and 2021). After that, the annual rate of growth in dividends is expected to be 7% and stay there for the foreseeable future. Starting with the tatest (2018) annual dividend of $1.94 per share. Rhyhorn's earnings and dividends are estimated to grow by 17% in 2019 , by 14% in 2020 , and by 10% in 2021021 before dropping to a 7% rate. Given the risk profle of the firm, assume a minimum required rate of return of at least 11%. a. Calculate the projected annual dividends over the years 2019, 2020, and 2021. b. Determine the present value of dividends during the inital variable-gromth period. c. What do you beleve the price of Rhytrom stock will be at the end of the initial growth period (2021)? d. Having determined the expected future price of Rtythom stock in part c. discount the peice of the stock back to ts present value. e. Determine the total intrinsic value of Rhyhom stock based on your previous calculations. a. The projected annual dividend for 2019 is $ (Round to the nearest cent.) Step by Step Solution
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