FNAN 303 - Practice questions Chapter 6-Cost of capital estimation and Dividend discount model 1. DP world has forecasted the expected dividends for 3 years as follows. All values are in Dirhams. The estimated cost of equity capital of the company is 10%. Required: What is the intrinsic value of DP Company's stocks today? (a) How much will you be willing to buy the stock today if you wish to hold the stock for two years? Suppose that the price of the stock by the end of 2025 is 28 Dirhams. (b) What is the intrinsic value of DP Company's stocks today, if you assume that, the dividends will grow at a constant growth rate of 5% after the third year of the forecast horizon? (c) What is the intrinsic value of DP Company's stocks today, if the dividend in year 2026 is expected to remain constant for indefinite periods