Chapter 7: Valuation of Stocks and Corporations a. What is the current value of the company's stock

Chapter 7: Valuation of Stocks and Corporations a. What is the current value of the com n 's stock? D, go.5 Year Dividend PV of dividends and PV of horizon value $0.00 $0.60 9.5% 4% 8% Short-run g; during the first five years from 2006 to 2009 Long-run g; stardning from 2010 and all following years. 4% $0.60 4% 2 4% 3 4% 4 4% 5 6 = (1+gc) Horizon value