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Chapter 9 Hw Taussig Technologies Corporation (TTC) has been growing at a rate or 12% per year in recent years. This same growth rate is
Chapter 9 Hw Taussig Technologies Corporation (TTC) has been growing at a rate or 12% per year in recent years. This same growth rate is expected to last for another 2 years, then line to gn : 5%. . If D0-$1.30 and rs 8.00%, what is TTC's stock worth today? Round your answer to the nearest cent. Do not round your intermediate calculations. What is its expected dividend yield at this time, that is, during Year 1? Round your answer to two decimal places. Do not round your intermediete calculations. What is its capital gains yields at this time, that is, during Year 17 Round your answer to two decimal places. Do not round your intermediate calculations b. Now assume that TTC's period of supernormal growth is to last for 5 years rather than 2 years. How would this affect the price, 1. Due to the longer period of supernormal growth, the value of the stock will be higher for each year. The total return as well as l. Due to the longer period of supernormal growth, the value of the stock will be lower for each year III. Due to the longer period of supernormal growth, the the stock IV. Due to the longer period of supernormal and capital gains yield will remain the same for the duration of the supernormal growth period. and capital gains yield will differ for the duration of the supernormal growth period. between dividend yield and capital gains yieid will differ for the duration of between dividend yield and capital gains yield will differ for the and capital geins yieid will differ for the duration of the supernormal growth period between dividend yield the value of the stock will be higher for each year. Although the total return will remain the same, the distribution the value of the stock will be lower for each year. Although the total return will remain the same, the distribution ach yar Period duration of the supernormal growth period. longer period of supernormal growth, the value of the stock will be higher for each year. The total return as well as the distribution between dividend yield Select- dividend and capital gains yields be once its period of supernormal growth ends? (Hint: These values wil be the same C. What will TTC's the case of 2 or 5 years of supernormal growth; the calculations are very easy.) Round your answers to two decimal places 810
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