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Excel Activity: Nonconstant Growth and Corporate Valuation Taussig Technologies Corporation (TTC) has been growing at a rate of 20% per year in recent years. This

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Excel Activity: Nonconstant Growth and Corporate Valuation Taussig Technologies Corporation (TTC) has been growing at a rate of 20% per year in recent years. This same growth rate is expected to last for another 2 jears, then decline to gn=7%. The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below. Do not round intermediate calculations. a. If D0=$1.30 and r5=10%, what is TCC stock worth today? Round your answer to the nearest cent. s per share' What are its expected dividend, and copital gains yields at this time, that is, during Year 17 Round your answers to two decimal places. Dividend yield: % Capital gains yield: b. Now assume that TTC's period of supernormal growt is to last for 5 years rather than 2 years. How would this affect the price, dividend yield, and capital gains yield? Round your answer for the price to the nearest cent and for the dividend yield and capital gains yield to two decimal places. The price will to s per share. The dividend yield wil to \%. The copital gains yield will to %. C. What witt TTC's dividend and capital gains yields be ence its pertod of supernormal growth ends? (Hint: These values will be the same regardless of whether you examine the case of 2 or 5 years of supernormal growth; the calculations are very easy.) Round your answers to two decimal places. 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, dividend yield, and capital gains yield? Round your answer for the price to the nearest cent and for the dividend yield and capital gains yield to two decimal places. The price will to $ per share. The dividend yield will to \%. The capital gains yield will to %. c. What will TrC's dlvidend and capital gains yields be once its period of supernormal growth ends? (Hint: These values will be the same regardless of whether you examine the case of 2 or 5 years of supernormal growth; the calculations are very easy.) Round your answers to two decimal places. Dividend yield: % Capital gains yield: % d. TTC recently introduced a new line of products that has been wildly successful, On the basis of this success and anticipated future success, the following free cash flows were projected (in millions): After the 10th year, TrC's financial planners antic pate that its free cash flow will grow at a constant rate of 7%. Also, the firm concluded that the new product caused the WACC to fall to 9%. The market value of TTC's debt is $1,100 million, it uses no preferred stock, it has zero nonoperating assets; and there are 20 million of common stock outstanding. Use the corporate valuation model to value the stock. Round your answer to the nearest cent

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