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Expected dividends as a basis for stock values The following graph shows the value of a stock's dividends over time. The stock's current dividend is
Expected dividends as a basis for stock values The following graph shows the value of a stock's dividends over time. The stock's current dividend is $ per share, and dividends are expected to grow at a constant rate of per year. The intrinsic value of a stock should equal the sum of the present value PV of all of the dividends that a stock is supposed to pay in the future, but many people find it difficult to imagine adding up an infinite number of dividends. Calculate the present value PV of the dividend paid today and the discounted value of the dividends expected to be paid and years from now Assume that the stock's required return is Note: Carry and round the calculations to four decimal places. tableTime Period,Dividend's Expected Future Value,Dividend's Expected Present ValueNowEnd of Year End of Year End of Year Using the blue curve circle symbols plot the future value of each of the expected future dividends for years and The resulting curve will illustrate how the FV of a particular dividend payment will increase depending on how far from today the dividend is expected to be received. Note: Round each of the discounted values of the dividends to the nearest tenth decimal place before plotting it on the graph. You can mouse over the points in the graph to see their coordinates.
Expected dividends as a basis for stock values
The following graph shows the value of a stock's dividends over time. The stock's current dividend is $ per share, and dividends are expected to grow at a constant rate of per year. The intrinsic value of a stock should equal the sum of the present value PV of all of the dividends that a stock is supposed to pay in the future, but many people find it difficult to imagine adding up an infinite number of dividends.
Calculate the present value PV of the dividend paid today and the discounted value of the dividends expected to be paid and years from now Assume that the stock's required return is
Note: Carry and round the calculations to four decimal places.
tableTime Period,Dividend's Expected Future Value,Dividend's Expected Present ValueNowEnd of Year End of Year End of Year
Using the blue curve circle symbols plot the future value of each of the expected future dividends for years and The resulting curve will illustrate how the FV of a particular dividend payment will increase depending on how far from today the dividend is expected to be received.
Note: Round each of the discounted values of the dividends to the nearest tenth decimal place before plotting it on the graph. You can mouse over the points in the graph to see their coordinates.
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