Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Deployment Specialists pays a current (annual) dividend of $1 and is expected to grow at 22% for two years and then at 4% thereafter. If

Deployment Specialists pays a current (annual) dividend of $1 and is expected to grow at 22% for two years and then at 4% thereafter. If the required return for Deployment Specialists is 10.5%, what is the intrinsic value of Deployment Specialists stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.) I know what the answer is and how to set up the equation but when i do it this way i end up with a number in the single much smaller than 21.83

=

$1 1.22/

+

$1 1.222/

+

$1 1.222 1.04/

1 + 0.105

(1 + 0.105)2

(0.105 0.04) (1 + 0.105)2

= $21.83

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

DeFi And The Future Of Finance

Authors: Campbell R. Harvey, Ashwin Ramachandran, Joey Santoro, Vitalik Buterin, Fred Ehrsam

1st Edition

1119836018, 978-1119836018

More Books

Students also viewed these Finance questions