Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Firm XYZ just paid a dividend of $6.00 this year, and its dividend is expected to grow at 30% for the next year. After you
Firm XYZ just paid a dividend of $6.00 this year, and its dividend is expected to grow at 30% for the next year. After you receive all the next year's dividend, you expect to sell the stock at $100 immediately. Assume that the discount rate is 20% and dividends are paid quarterly. What is the intrinsic value of the stock?
A. 89.18
B.85.07
C.88.65
D.91.52
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started